LONDON, Feb 18 (Reuters) - Britain's Costa Coffee said it would give more than 15,000 hourly-paid workers a 5% pay increase from April 1, above the UK's current inflation rate of 2.5% and partly reflecting a step-up in the government-mandated national minimum wage.

The increase will likely be noted by the Bank of England, which is keeping a close eye on wage settlements as it assesses further moves in interest rates after cutting by a quarter-point earlier this month.

Costa Coffee, a unit of Coca-Cola Co KO.N, said on Tuesday its starting pay would rise to 12.60 pounds ($15.87) an hour, from 12 pounds.

The new rates come ahead of the UK government's 6.7% hike in the national minimum wage to 12.21 pounds for most adults that will kick in from April.

British pay growth accelerated in late 2024, according to official data, also published on Tuesday, that suggested the jobs market was holding up and underscored why the Bank of England has been cautious about cutting interest rates despite a weak overall economy.

Costa Coffee, which trades from 1,500 company-owned stores, said more experienced baristas would see their pay increase to at least 12.93 pounds an hour, while staff in central London will receive an extra 1 pound an hour.

Supermarket chains Sainsbury's SBRY.L and Lidl GB have also recently announced above-inflation pay rises.

($1 = 0.7939 pounds)

(Reporting by James Davey; Editing by David Holmes)

((james.davey@thomsonreuters.com))