The government have announced that the minimum wage in the UK for workers over 21 years old will rise by 7p to £5.80 an hour from October this year.

The rate for 18 to 21-year-olds will increase by 6p to £4.83 and for 16 and 17-year-olds will go up by 4p to £3.57.

Many small business groups had called on the government to freeze the minimum wage due to the number of companies that are struggling in the economic downturn.

"Businesses should be free to negotiate pay levels with staff individually according to what is affordable during these tough times - rather than keep up with a one size fits all pay rise," said John Wright of the Federation of Small Businesses (FSB).

"The FSB is grateful the government has raised the minimum wage by only 7p, but with one hundred and twenty businesses closing a day and when many are struggling with cashflow, this is unfortunately another cost on employers."

www.ukba.co.uk