LONDON, March 1 (Reuters) - Britain's third-largest supermarket group Asda said on Friday it would give more than 120,000 store workers an 8.4% pay rise from July 1, following a similar move by other large British retailers as the government's national minimum wage goes up.

Asda said its hourly rate for retail pay would rise from 11.11 pounds ($14.04) to 12.04 pounds for those outside London and from 12.28 pounds to 13.21 pounds for workers in the capital from July 1, after a smaller interim increase from April.

Britain's main government-mandated minimum wage rate is due to rise to 11.44 pounds an hour from 10.42 pounds on April 1.

The supermarket group, which was acquired by the billionaire Issa brothers and private equity firm TDR Capital from Walmart in 2021, said the rate increase would cost 150 million pounds.

The Bank of England is keeping a close eye on pay settlements as it assesses whether the inflationary pressure in the British economy has eased enough for it to cut interest rates from their highest level since 2008.

"Asda’s proposed new rates of pay not only exceed the current Real Living Wage but would make us the highest paying grocery retailer in the UK," Hayley Tatum, Chief People and Corporate Affairs Officer at Asda, said.

The Real Living Wage is based on a calculation to determine how much workers and their families require to fund everyday needs. It is paid voluntarily by some British businesses.

This week, food and clothing retailer Marks & Spencer announced a 10.1% pay raise for around 40,000 store staff. Sainsbury's, Aldi, Lidl, and Costa Coffee have also announced pay rises for 2024. ($1 = 0.7913 pounds) (Reporting by Farouq Suleiman Editing by William Schomberg)