UK supermarket chain Asda says it will raise staff pay by 10%

Scales to weigh loose fresh produce are seen in the UK supermarket Asda in Leeds
Scales to weigh loose fresh produce are seen in the UK supermarket Asda in Leeds, Britain, October 19, 2020. REUTERS/Molly Darlington/

LONDON, Feb 17 (Reuters) - British supermarket chain Asda announced a 10% pay rise for 115,000 staff on Friday, the kind of increase likely to catch the attention of the Bank of England, which is worried about inflation pressure in the economy.

Asda said most of the pay rise would take place in April, with a further small increase in July. Hourly pay for most workers will rise to 11.11 pounds ($13.28) an hour from 10.10 pounds, while workers in the London area will see pay increase to 12.28 pounds an hour from 11.27 pounds.

Asda said the increase would cost it 141 million pounds in 2023, and had been agreed with the retail workers' trade union Usdaw. Including the latest increase, Asda has raised staff pay by 18% over the past two years.

Staff who had worked for more than three months with the company would also be given a bonus which would be set at the end of February, Asda added.

BoE Governor Andrew Bailey earlier this month expressed concerns about wage-setting, despite signs that the surge in inflation - which hit 11.1% in October before falling to 10.1% in January - had turned a corner.

Asda said it would freeze prices on 600 products between Feb. 21 and May 31 to help customers manage rising living costs.

($1 = 0.8368 pounds)

Writing by William Schomberg; editing by David Milliken

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