The hourly rate of pay for employees in London will be increased by 2.1 per cent to £7.20 per hour.
Following research from the Living Wage Unit, the Mayor of London has decided that Londoners will now receive almost £2 more an hour above the national minimum wage (£5.35).
Ken Livingston made the decision after the report showed that anyone living in London who earns £6.25 an hour or less is on or below the poverty line.
The report states: "In London, largely because of housing costs, you need an hourly wage rate almost 20 per cent above the National Minimum Wage (NMW) rate of £5.35 just to take you above the poverty level.
"A margin of 15 per cent has therefore been added to the poverty threshold wage. The result is a London Living Wage of £7.20 per hour - an increase of 2.1 per cent on last year's figure and a 7.5 per cent increase in the two years since its introduction.
"About one in seven of London's full-time workers and almost half of our part-time workers are paid at a rate below this Living Wage. These figures give some idea of the scale of the challenge facing us."