The government has announced that the national minimum wage in the UK is set to rise to £5.80 from October.

The 7p hike will on be the adult statutory rate, while the rate for 18 to 21-year-olds will increase by 6p to £4.83 and for 16 and 17-year-olds will go up by 4p to £3.57.

There had been calls from the British Chambers of Commerce to leave the rate as it is during the recession but the wage base will increase just a year after the statutory hourly rate was increased by 21p an hour.

The government also announced that, from October 2010, the adult statutory minimum rate would apply to 21-year-olds rather than the current system from 18 upwards.

Business secretary Peter Mandelson said the Low Pay Commission had carefully examined the latest economic data before making their recommendations on the minimum wage rate citing a need to balance the needs of both workers and businesses.

"The government agrees with this assessment and has accepted the recommendations for these new rates to take effect in October," said Lord Mandelson.

The minimum wage was introduced in April 1999.