Stephen Byers, the trade and industry secretary, agreed the increasing in talks with Gordon Brown, the chancellor, over the weekend. Mr Byers will announce that further increases will be made 'when the economic conditions allow'.
The youth rate, for those aged 18 to 21 inclusive, will be increased in June from£3 an hour to£3.20. The new adult rate will be introduced in October to give businesses time to prepare for the extra burden on their costs.
Tomorrow Mr Brown and Mr Byers will reject backbench demands at a private meeting of the parliamentary Labour Party for annual rises in the minimum wage in line with inflation.