"At a time of considerable uncertainty for businesses and with economic growth already slowing, we welcome today's moderate approach," stated John Cridland, deputy director general of the CBI.

The minimum wage will not increase beyond the growth in average earnings, which the business community has commended as a sensible balance between workers’ rights and economic stability.

The rise is at 3.8% from the previous figure of %5.52 per hour. The minimum wage for 18 to 21 year-olds will also increase to £4.77 per hour from £4.60, and 16 to 17 year olds will need to be paid at a minimum rate of £3.53 per hour, up from £3.40. It is estimated that a million people will benefit from the increases, and that two-thirds of this number will be women.