CBI urges minimum wage freeze

The current minimum wage for adults is £4.85 an hour

The UK's minimum wage should be frozen at £4.85 an hour until 2006, the Confederation of British Industry says.

Firms need a "pause year" to assess the impact of last month's above inflation rise, the business leaders' group will tell the Low Pay Commission (LPC).

The minimum hourly rate for the over 21s went up from £4.50 to £4.85.

Union body the TUC, which wants the rate to rise to £5.35 next year, before moving to £6 in 2006, has described the CBI submission as "mean spirited".

The LPC is the independent, non-departmental body which advises the government on the minimum wage.

The CBI said it would approve a rise to a little over £5 an hour, but not until 2006.

CBI director general Digby Jones said there was "increasing concern" about the impact of the minimum wage among employers in sectors such as hospitality and agriculture.

"The country's hard-earned stability will be threatened if we see wage inflation across the board caused by large increases at the lower end," Mr Jones said.