The adult rate for the statutory minimum wage will rise from £5.35 to £5.52 from today.

The hourly wage will go up from£4.44 to£4.60 for 18- to 21-year-olds, while the rate for 16- and 17-year-olds will increase from£3.30 to£3.40 an hour.

The increases will mean that more than 1 million workers will receive a pay rise.

The annual leave entitlement will also increase from 20 to 24 days a year for full-time workers and will increase to 28 days from April 2009.

Employment relations minister Pat McFadden said: "These changes will improve the lives of millions of British workers, giving them more time with their families and ensuring our lowest paid workers continue to be able to earn a living wage."

However, the British Retail Consortium called for more certainty about the National Minimum Wage. It released figures showing the size and knock-on effects of last year’s increase, which cost retailers£1.7 billion – 13 per cent more than expected.

The BRC said that the rising minimum wage accounted for more than half of the 12 per cent increase in retailers’ total wage bills for shopfloor staff between 2006 and 2007.

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