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BRC says Low Pay Commission made the "right decision for these difficult times".
The UK adult minimum wage will increase by 7p to £5.80 an hour from October, it was announced today.
The rate for 18-21 year olds will go up by 6p to £4.83, while 16-17 year olds will get a further 4p, taking their hourly rate to £3.57.
The move comes just one year after the minimum hourly wage was upped by 21p. Employers have had to suffer additional costs over the last two years as the annual leave entitlement increased from 20 to 24 days - and, since April 2009, 28 days.
In the evidence it submitted to the Low Pay Commission, the British Retail Consortium (BRC) said this year's increase must be no more than 1.5%.
BRC director general Stephen Robertson said: "The Low Pay Commission and the Government have listened to our evidence. This is the right decision for these difficult times and exactly what we asked for."
He added: "The best protection for wages is preserving jobs to keep people working and earning not handicapping employers with excessive new costs.
"1.2% strikes a common sense balance between helping low-paid workers and enabling retailers to maintain, and where possible, increase job opportunities."
It was also announced that the higher adult statutory minimum wage would apply to 21-year olds from October 2010.