UK mulls 5.5% pay rise for 2m workers – Reeves

Britain’s new Finance Minister, Rachel Reeves, is considering substantial pay increases for nearly 2 million government employees to avert major public sector strikes.

In a statement on Sunday, Reeves indicated that the government may approve a 5.5 per cent wage rise recommended by two pay review bodies for 460,000 teachers and 1.4 million National Health Service (NHS) staff.

The proposed pay increases could cost around £3 billion ($3.88 billion), according to the Institute for Fiscal Studies (IFS). This move comes as the Labour Party, which recently won a general election with a promise of national renewal, seeks to address public sector pay amid Britain’s current 2 per cent inflation rate.

Reeves stressed the importance of supporting public service workers and highlighted the potential costs of prolonged disputes with unions, including further industrial action and challenges in recruiting staff.

She acknowledged that funding these raises would require raising taxes, increasing borrowing, or cutting spending in other areas. Reeves plans to set out her plans for public sector pay deals and announce the next budget date by the end of this month.

Attribution: Reuters.