The National Living Wage means employees aged over 25 will be paid £7.20 an hour from next April, rising to 60 per cent of median earnings in 2020, estimated to be around £9 an hour.
The CBI, Costa Coffee and Premier Inn parent group Whitbread and high street bellwether Next have all warned that the National Living Wage will lead to lower profits, price increases and job cuts.
But a report by non-partisan thinktank Centre for London suggests that the capital's labour market could stomach a minimum wage of between £7.05 and £8 an hour. London earnings at the lower end of the spectrum are higher than in other cities, while there's also fewer people on minimum wage.
"Given that the Chancellor’s new National Living Wage will begin at the lower end of that range, starting from £7.20 an hour in 2016, it should not lead to significant job loss in London," it said.
"The bulk of the 60,000 job losses that the Office of Budget Responsibility estimates will occur as a result of the new policy are therefore likely to be outside London."