Minimum wage will rise to 5.52 stg/hour

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LONDON (Reuters) - The minimum wage for over-21s should rise 17 pence to 5.52 pounds per hour in October, the government said on Wednesday as it accepted the recommendation of its Low Pay Commission.

The 3.17 percent increase is lower than the 4.0 percent rate that annual average earnings rose by in three months to December and follows a nearly six percent rise in the pay floor last year.

But it compares favourably with annual pay increases for public sector workers of 1.9 percent.

"More than a million workers, two thirds of them low paid women will benefit from this announcement," said Alistair Darling, trade and industry secretary.

Unions were disappointed. "This is a missed opportunity to close the growing gap between the rich and poor and we hope that it doesn’t signal a retreat by the Low Pay Commission," said UNISON general secretary Dave Prentis.

Business groups welcomed the modest increase.

"We are pleased that the government has recognised the additional costs that many employers paying the National Minimum Wage will face when statutory annual holiday entitlement increases in October," said David Yeandle of the Engineering Employers’ Federation.

But he added the government should provide greater certainty by subjecting future increases on a pre-determined formula.

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