CBI cautious over rise in minimum wage

The
CBI has warned that yesterday’s rise in the National Minimum Wage (NMW) may do
"more harm than good".

Reacting
to the announcement that the NMW will rise to £4.85 in October, the CBI’s
deputy-director general John Cridland said he would be monitoring its impact
very carefully.

"The
CBI understands why this has been done, but the jury is out on whether it will
do more harm than good.

"This
is the second successive increase of more than 7 per cent. It means that for
the first time the wage is worth more in real terms than it was when introduced
in 1999," he said.

"Consequently,
it will bite with more businesses than ever before. So the Government has taken
a risk with the impact on business and we will be monitoring the outcome
extremely carefully."

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The
CBI believes the sectors most affected will be hospitality, retail, business
services, social care, textiles, agriculture, leisure and hairdressing.

By Ross Wigham