The Organisation for Economic Co-operation and Development (OECD) has urged the government to reconsider plans to raise the National Living Wage (NLW) to as high as £9 per hour.

In the Autumn Statement on November 23, chancellor Philip Hammond pledged to raise the wage to £7.50 an hour next April, up 4% from £7.20. 

An OECD report said: “Caution is needed with the implementation of the policy to raise the National Living Wage to 60% of median hourly earnings by 2020. The effects on employment need to be carefully assessed before any further increases are adopted, especially as growth slows and labour markets weaken.” 

The organisation has raised its UK growth forecasts for this year and 2017, predicting the UK’s economy to expand by 2% this year, up from earlier forecasts of 1.8%, while 2017 has been lifted to 1.2% compared to the previous forecast of 1.0%. Germany and France are predicted to grow by 1.7% and 1.6% respectively.

The OECD said the upward revision was due to Bank of England action and the depreciation in sterling since the Brexit vote.