Public sector pay increases likely to be bigger than in private firms

Pay awards for public sector workers in Britain are expected to overtake the private sector for the first time in four years, according to a report, amid growing business alarm at the government's tax plans.

- Richard Partington

After October's budget confirmed above-inflation pay rises for public sector workers and higher taxes on employment, the Chartered Institute of Personnel and Development (CIPD) said there was a growing divide in the outlook for jobs and wages.

It said businesses were facing increased costs that could "act as a barrier to growth and could lead to employers offering lower pay rises", just as the public sector was starting to benefit from stronger pay after years of restraint.