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UK gives above-inflation pay rises again to public sector workers
Published by Global Banking & Finance Review®
Posted on May 22, 2025
2 min readLast updated: January 23, 2026
Global Banking & Finance Review®
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Published by Global Banking & Finance Review®
Posted on May 22, 2025
2 min readLast updated: January 23, 2026
UK public sector workers, including teachers and doctors, receive above-inflation pay rises for the second consecutive year under the Labour government.
LONDON (Reuters) -Many British public sector workers, including teachers, doctors and members of the armed forces, will get above-inflation pay increases for the second year in a row under the country's Labour government, according to details published on Thursday.
Teachers and doctors will receive increases of 4% while nurses and others health workers will get 3.6%. The armed forces are in line for a 4.5% rise and prison officers will see their pay go up by 4%.
The increases are above the most recent rate of inflation which stood at 3.5% in April.
However, they are less generous than bigger increases announced last year shortly after Prime Minister Keir Starmer led Labour to victory in a national election.
"This year, pay awards are once again above what departments declared would be affordable, but not to anything like the same extent," Ben Zaranko, associate director at the Institute for Fiscal Studies, a think tank, said.
"The gap will, nonetheless, need to be plugged from somewhere," Zaranko said.
Finance minister Rachel Reeves is due to announce a multi-year review of public sector spending plans on June 11.
Data published earlier on Thursday showed the government once again borrowed more than expected by analysts in April.
IFS Research Fellow Luke Sibieta said the increases would still mean most teachers' salaries have fallen in inflation-adjusted terms since 2010.
(Writing by William Schomberg; editing by Suban Abdulla)
Many public sector workers, including teachers and doctors, will receive above-inflation pay increases of 4%, while nurses will get 3.6%. The armed forces are set for a 4.5% rise.
The pay increases are above the most recent inflation rate of 3.5% recorded in April, indicating a slight positive adjustment for public sector workers.
The finance minister, Rachel Reeves, is expected to announce a multi-year review of public sector spending plans, which will include these pay increases.
Despite the pay increases, IFS Research Fellow Luke Sibieta noted that most teachers' salaries have fallen in inflation-adjusted terms since 2010.
The increases are less generous than those announced last year, following Labour's victory in a national election led by Prime Minister Keir Starmer.
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