This means that the rate for workers over 23 would go up from the current £10.42 an hour to at least £11.

‘Since introducing the national living wage, I want to make sure that work continues to pay, today I take a step forwards. The current rate is £10.42 an hour and this will be increased,’ Chancellor Jeremy Hunt said.

‘I am waiting for recommendations from the Low Pay Commission and will follow their recommendation, but whatever it is, I will increase the national living wage to at least £11 an hour next year. That’s a pay rise for almost two million workers.’

He did not talk about any tax cuts, stressing that achieving the Prime Minister’s target of halving inflation to 5% was a priority for the Treasury. The current inflation rate is 6.7%.