National minimum wage to increase

The national minimum wage is to rise by 12p an hour to £6.31 for adults and by 5p to £5.03 for 18-to-20-year-olds from October, the government has announced.

Business secretary Vince Cable said the government accepted the recommendation of the Low Pay Commission.

However, although the Commission said rate for apprentices should be frozen, Mr Cable said it would rise by 3p to £2.68 an hour.

The British Chambers of Commerce said the increase in the adult rate would add to the cost pressures on business, although it called the rises for youth workers and apprentices "restrained".

TUC general secretary Frances O'Grady said he would have liked to have seen minimum wage rates go up further.

The increases are below current inflation levels.

Retail Prices Index (RPI) inflation currently stands at 3.2% and the Consumer Prices Index (CPI) at 2.8%.