Rishi Sunak has warned he will not shy away from making decisions “people may not like” when it comes to public sector pay.
The Prime Minister did not rule out ignoring advice by independent review bodies to hike public sector pay when speaking in Nottinghamshire on Wednesday.
Sunak, who is worth more than £700 million, said the UK Government would “make the right and responsible decisions on things like public sector pay”.
He has set halving inflation by the end of the year as his top priority ahead of a likely general election in 2024.
But prices have continued to rise. The Consumer Prices Index (CPI) inflation remained at 8.7 per cent in May despite experts forecasting it would fall.
Sunak argued that, with inflation “higher than we’d like”, it was important to “make the right and responsible decisions on things like public sector pay”.
Junior doctors in England are due to stage a five-day strike next month as their row with the Government over pay and staffing rumbles on.
Referring to a junior doctors strike scheduled in England next month, Sunak said: “It’s just going to make it harder to bring waiting lists down and I think people should recognise the economic context we’re in.
“I’m going to make the decisions that are the right ones for the country.
“That’s not always easy, people may not like that, but those are the right things for everybody that we get a grip of inflation.”
Pay review body recommendations are usually accepted by the government, although ministers can choose to reject or partially ignore the advice.
But this would be a controversial move after the Government defended last year’s below-inflation pay rises by saying it had followed the bodies’ advice.
It could further inflame ongoing disputes with unions and lead to more industrial action.
Assistant general secretary of the Trades Union Congress (TUC) Kate Bell said any decision to ignore pay review body advice would be “driven by politics, not economics”.
She said public sector wages had fallen “well behind inflation” and that there had been a “15-year wage squeeze where wages haven’t kept up with inflation”.
She told BBC Radio 4’s Today programme: “We had the Government, back in the winter when they were refusing to negotiate with NHS workers — eventually, of course, they did come to the table — relying very heavily on the pay review bodies, saying we had to take into account this independent process.
“It is a bit rich to hear them now saying, ‘Well, we’re going to overturn those independent recommendations’ when we haven’t even seen them be published yet.”
SNP Westminster Deputy Leader Mhairi Black said: "Public sector workers are paying an unacceptable price for Westminster failure - showing why Scotland needs independence.
"After thirteen years of Tory austerity, it beggars belief that Rishi Sunak is considering imposing even more cuts to the wages of nurses, teachers, police officers and others. Public sector workers must not be punished, yet again, because the Tories wrecked the UK economy with Brexit and shambolic mismanagement.
"The SNP is the only party offering real change with independence, real help with the cost of living, and real opposition to Tory cuts. The pro-Brexit Labour Party is too busy copying Tory policies to stand up to the UK government.
"The SNP will press the UK government to accept the independent pay recommendations, at minimum - but only by voting SNP at the next election can Scotland protect public sector workers and get rid of unelected Tory governments for good with independence."
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