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CBI chief tells companies to pay more as the economy improves

CBI warns the number of workers on minimum wage is "a serious challenge"

The head of the UK's leading business lobby group has called on companies to start paying their staff more as the economy improves.

John Cridland, director-general of the CBI, insisted companies must offer employees the chance of progressing in their careers as the recovery gains momentum.

He warned that hundreds of thousands of Britons are “stuck in minimum wage jobs without routes to progressions” despite the recent economic upturn.

Cridland added that the number of workers on minimum wage is "a serious challenge" that businesses and the government must tackle.

In his New Year's message, Cridland said: “As the financial situation of many firms begins to turn a corner, one of the biggest challenges facing businesses is to deliver growth that will mean better pay and more opportunities for all their employees after a prolonged squeeze."

He also expects wages to improve, and firms to begin expanding their workforce next year- for the first time the recession began.

"It's really positive news that, for the first time since the start of the recession, 2014, will see most firms increasing the size of their workforce, boosting their graduate intake and the number of apprentices they take on."

His remarks came as the country’s biggest online recruitment agency, reed.co.uk, predicted that new year will see the tide turn for the UK jobs market with the rate of growth in new vacancies overtaking job applications for the first time in five years.