Chancellor of the Exchequer Rachel Reeves has announced a stricter approach to public sector pay increases in the UK, with the aim of reassuring financial markets about the management of the nation's finances.

In the future, public sector workers will only receive pay rises above inflation if they can demonstrate improvements in productivity. This represents a significant change in the Treasury's position. Government officials have emphasized that this policy seeks to balance the interests of public sector employees with the financial responsibilities owed to taxpayers. The new guidelines demonstrate a commitment to fiscal restraint while also addressing the challenges of public sector compensation.