Public Sector Pay Rises Could Cost up to £10 Billion, Economist Warns

Paul Johnson said he was ‘not terribly surprised’ by reports that pay review bodies could recommend 5.5 percent rises for teachers and nurses.

Chancellor Rachel Reeves giving a speech at the Treasury in London on July 8, 2024. Jonathan Brady/PA Wire

The Government could need up to £10 billion to cover public sector pay increases if reports of a 5.5 percent rise prove true, an economist has warned.

Independent pay review bodies are reported to be preparing to recommend such an increase for teachers and around 1.3 million NHS staff, according to The Times, well above the figure the Government is thought to have been preparing for.