The island’s Chamber of Commerce says it is ‘deeply concerned’ at plans to increase the minimum wage by three times the rate of inflation.

It says the 9.9% rise, the biggest jump in the rate in recent years, will impact on struggling businesses, particularly in the hospitality, retail and care sectors - and warned it could lead to more closures and job losses.

Tynwald next month will be asked to approve an increase in the single hourly rate from £12.25 to £13.46, which if carried, will come into effect from April 1 next year.

This follows approval at the July Tynwald of the recommendation that the rate should be set at 66% of Isle of Man median earnings.

The youth rate will also rise, from £9.55 to £10.76, a 12.7% increase.

In response, the Chamber of Commerce called on government to publish a detailed impact assessment.

In a statement, it said: ‘The Chamber noted back in July that changes to the minimum wage calculation methodology were imminent.

‘The now-confirmed 9.9% increase represents one of the largest adjustments in recent years and a jump that will likely make it one of the highest minimum wages globally.

‘This comes at a time when official figures show that inflation is considerably lower. The inflation report for August 2025, compiled and published by the Statistics Isle of Man team at the Cabinet Office, shows the annual rate of inflation was just 3.3%.

‘While we support fair pay, we remain deeply concerned about the impact this sharp rise, three times the rate of inflation will have on local businesses, particularly in the hospitality, retail, and care sectors, where operating margins are already under extreme pressure.

‘This winter, higher wage costs will combine with higher energy bills and reduced consumer spending. Many of our members and small employers are already highlighting that they simply cannot absorb these combined pressures.’

The Chamber said the increased underscores one of its long-standing concerns - the use of the combined median wage to set benchmarks masks the growing disparity between public and private sector pay.

Public sector salaries tend to be significantly higher, it pointed out, and merging these figures with lower private sector earnings creates reference points that are ‘unrealistic and unsustainable’ for many employers.

‘Again, this has been a serious concern of the Chamber and its members,’ it said.

It added: ‘We urge the government to work with the Chamber and publish a detailed impact assessment of this wage increase, and to consider targeted support measures for the most affected sectors.

‘Without such support, there is a serious risk of more business closures and job losses at precisely the time our economy needs resilience and stability.’

Treasury Minister Dr Alex Allinson said he believed the new rate ‘strikes the right balance’ between prioritising fair wages for those on low pay and supporting the financial stability of enterprises.

Tim Johnston MHK, Minister for Enterprise, acknowledged the increase would impact on smaller businesses and said his department does offer a range of support.