The National Minimum Wage is to be increased by 2.2%, taking the adult minimum wage from £5.80 per hour to £5.93 from October this year.

The increase, announced alongside last week's budget, poured further gloom on small businesses' hopes of recovery from recession. Last year, UK employees received on average a 1% pay rise, while average private sector pay fell by 0.7%.

British Retail Consortium director general Stephen Robertson called the hike "downright irresponsible". He asked: "How can an increase that is virtually double last year's be justified? Economic conditions were far weaker in the run up to this year's decision than 12 months earlier."

Robertson added that it was "sheer madness" to force new costs on this scale onto retailers.

The Association of Convenience Stores (ACS), which argued strongly that there should be no increase in the National Minimum Wage this year, warned that the decision would threaten job creation in the retail sector.

ACS chief executive James Lowman said: "Throughout his budget speech the Chancellor stressed the need to support the economic recovery and not to threaten jobs. We know that when faced with increases in the minimum wage retailers will cut back on jobs and hours, so we think that this is an ill-judged and mis-timed decision."

He added that the latest rise was part of a series of ministerial commitments that would see consistent increases in the national minimum wage over the next five years. "This is a political promise that local shops will struggle to afford," Lowman said.