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CBI lobbies for 'modest' minimum wage increase

A modest rise in the UK minimum wage is needed next year if UK businesses are to remain competitive, according to the Confederation of Business Industry.

The CBI said the hourly adult pay rate of £5.52 which came into force last week makes the UK minimum wage the third highest in the world after France and Australia. The CBI said the rises are damaging some firms.

The industry body claims that UK wages have risen faster than any other developed country and is calling for only a modest increase to the minimum wage in 2008. The CBI said: “The impact on firms not just of increased minimum wage costs, but also of new employment rights, must be taken into account."

CBI deputy director general John Cridland added: “Many people’s living standards have been helped by the minimum wage. But previous steep rises have loaded extra costs onto employers, who face a less certain outlook for next year as interest rates bite and the world economy slows.

“This year’s increase makes our minimum wage the third highest in the world. The era of continually increasing the numbers of employees covered by the wage should now come to an end - the Low Pay Commission itself acknowledges the present situation requires a more cautious approach.”

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