Minimum wage to rise by 7p an hour

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The new adult rate for workers aged 22 and over will come into effect in October.

The rate for 18 to 21-year-olds will rise from £4.77 to £4.83, while for 16 and 17-year-olds, the statutory rate will go up to £3.57 an hour from £3.53.

The Government said almost one million people will benefit from October's increase after it approved recommendations from the independent Low Pay Commission.

Business Secretary Lord Mandelson said: "The national minimum wage has been in place for 10 years and remains one of the most important rights for workers introduced in that time."

Lord Mandelson said he was proud of the difference the minimum wage had made to the lives of the UK's lowest-paid workers.

"It protects them from exploitation and also creates a level playing field for business, making a huge contribution to the UK's economic success.

"The Low Pay Commission has carefully examined the latest economic data before making their recommendations on the minimum wage rate, balancing the needs of workers and businesses in the current economic climate.

"The Government agrees with this assessment and has accepted the recommendations for these new rates to take effect in October."

The Government also announced it had accepted a Low Pay Commission (LPC) recommendation that the adult rate of the minimum wage should be extended to 21-year-olds, which will be implemented from October 2010.