In a letter to employees, the company revealed that new hires would be paid the statutory minimum wage of £10.42 per hour, set to rise to £11.44 in April, rather than the higher rates endorsed by the Living Wage Foundation.

Existing staff outside London will see their pay rates increase from £10.90 to £11.44 in April, while London-based employees will face a freeze at £11.95.

Despite record-paced nominal wage growth, the company’s move may suggest a shift in the dynamics, with the Bank of England closely monitoring developments. The central bank is concerned that persistent high inflation could necessitate prolonged high-interest rates if wages continue to rise rapidly.

As the UK anticipates a general election, Chancellor Jeremy Hunt has mandated a 9.8% increase in the statutory minimum wage from April, aiming to boost living standards. However, BrewDog’s shift may indicate that some companies find it challenging and less necessary to increase wages, particularly as redundancies rise and labour shortages ease.

While some economists speculate that companies paying the voluntary living wage may feel less pressure to compete on salaries, exceptions exist. Supermarket J Sainsbury announced a 9.1% increase in its minimum hourly wage, potentially triggering similar moves among competitors.

BrewDog defended its move, citing the need for “hard decisions” to restore profitability and financial stability after a challenging year. The company asserted that its overall benefits package, including paid sabbaticals and pet-related perks, remains more generous than industry averages, the Financial Times reports.

The Unite union condemned BrewDog’s shift, labelling it “outrageous” amidst the current cost-of-living crisis. BrewDog now faces internal resistance as its own staff challenges the decision to employ new workers at the legal minimum wage instead of the higher voluntary rate.