UNIONS have welcomed a U-turn by Ikea on May Day, after the Swedish flat-pack giant bowed to pressure and rowed back on its decision to drop the “real” living wage.

The transnational said over the weekend that it would now honour the minimum hourly rate of £10.85 in London and £9.50 in the rest of the country from May Day — the deadline for implementation set by the Living Wage Foundation (LWF).

Ikea sparked fury in November when it told workers that it would not pay the 20p hourly increase set by the LWF, citing a “challenging” retail environment — but continued displaying the foundation’s plaques on its sites.