Employer support organisation, the Forum of Private Business, has issued a response to the announcement by BIS that the minimum wage will increase.
Alex Jackman, head of policy at the Forum, said: 'In the current business climate any additional cost is an unwelcome one. However, we appreciate that for the second year running the Government has implemented an increase in the National Minimum Wage that is below inflation, and for this restraint employers will no doubt be thankful.

'Many of our members pay above the National Minimum Wage but we are in difficult economic times and the Government has recognised that any increase in NMW has a wage inflation rate higher up the scale.'

He continued: 'To put the wage rise in context, at the Budget the Government announced an Employment Allowance to save all employers £2000 on their staffing costs, to be implemented from April 2014. As the increase in National Minimum Wage comes into effect this October, today's increase will mean a business employing nine or more full time members of staff on the minimum wage will see over half of that wiped out before it even comes in.

'Given this impact, the country categorically cannot afford the misleadingly titled 'living wage' in its current predicament,' Mr Jackman concluded.