KIEV, Feb. 5 - Arcelor Mittal, the world's largest producer of steel, increased wages at its Ukrainian subsidiary by 11.4%, bowing to recent pressure from the country's prime minister, the company reported Friday.

The hike comes two weeks after Prime Minister Yulia Tymoshenko had warned Arcelor Mittal its must increase the wages by 25%, arguing that otherwise the government will reduce subsidies to the company.