Minimum wage and VAT change come into effect

<p>Minimum wage and VAT changes have come into effect in the UK this morning.</p>

A rise in the salaries of the lowest paid workers has been implemented today (October 1st), as have various changes to UK tax and benefits.

These include an increase to the minimum wage to £6.19 per hour from £6.08 per hour, however the rate for those aged under 21 will remain unchanged.

This freeze means 18-20-year-olds are paid at least £4.98 per hour, while 16 and 17-year-olds' earnings start at £3.68 per hour. Apprentice wages are up 5p to £2.65 per hour.

Value-added tax, meanwhile, will be levied on hairdressers' chairs and sports drinks.

The Trade Unions Congress (TUC) has welcomed the minimum wage rises, but believes younger people are still very disenfranchised.

"There is no evidence that the minimum wage has had an adverse impact on young people's employment so it is hard to see the logic behind their pay freeze," the TUC commented.

At 11:25 BST, the pound was lower versus the vast majority of its forex trading partners, sliding 0.1 per cent against the dollar and 0.4 per cent against the euro to £1 buying $1.614 and €1.251.

Find out about the pound and forex trading at City Index.

Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.