Rachel Reeves vows ‘iron discipline’ to manage economy amid public sector pay rise plans

Rachel Reeves, Britain’s newly appointed chief of the Exchequer, promised on Sunday to manage the economy with “iron discipline” but hinted at the possibility of above-inflation pay rises for public sector workers in a bid to ease ongoing strikes and industrial disputes.

The Labour government, facing demands from supporters and unions, is under pressure to boost funding for wages and benefits. Just two weeks after a landslide election victory, the new administration is making good on promises to avoid raising personal taxes or increasing the national debt. Reeves criticised the previous Conservative government, saying it had left “public services on their knees” and a debt almost the size of the entire economy.

Prime Minister Keir Starmer’s government is negotiating with striking hospital doctors and considering recommendations for pay rises for teachers and NHS workers that could exceed budget forecasts by 3 billion pounds ($3.9 billion). The government is also under scrutiny over a policy that limits welfare benefits to the first two children in a family, which it says it cannot afford to end.

(Based on information from the agency.)