The chancellor promised a full statement on pay board recommendations that teachers and NHS workers should receive 5.5% pay awards, before an autumn budget that is set to be one of the most difficult economic balancing acts in years.
While Reeves said denying such pay rises would bring its own costs, notably in likely strike action and a hit to recruitment and retention, economists said agreeing them would cost billions of pounds not on the balance sheet. Government spending plans, following an election in which Reeves and Keir Starmer repeatedly ruled out rises to many taxes, "aren't consistent with pay rises in the region of 5.5% to 6%", said Ben Zaranko, senior research economist at the Institute for Fiscal Studies (IFS).
"It's extremely difficult to see how you do that without finding some extra cash from somewhere, probably some combination of higher taxes or higher borrowing. It may be that they can fudge the fiscal rule or they get a bit lucky with the economic outlook. But I've got limited sympathy for the argument that things are economically much worse than we thought. It was all entirely predictable and predicted."
This story is from the {{IssueName}} edition of {{MagazineName}}.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber ? Sign In
This story is from the {{IssueName}} edition of {{MagazineName}}.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber? Sign In
First mass 24-hour event to help people put down their phones
Haunted by a pile of unread books? Or taunted by outdoor kit lurking in the cupboard? If you are one of the British adults who spends on average five hours a day looking at screens rather than participating in pastimes, perhaps it's time to join the offline revolution.
No longer the king of bling The staggering fall of rap star Sean 'Diddy' Combs
Brooklyn's grim Metropolitan Detention Center is, for the foreseeable future, home to Puff Daddy, AKA Sean Combs, one of the best-known voices in American entertainment and whose business empire once seemed to know no bounds.
Brandenburg stakes Last-minute push by German far right in key regional election
B jörn Höcke shielded his eyes from the lights as he peered from the stage into the crowds gathered on a square in front of a gothic church in central Cottbus.
'It's guerrilla war' The fire teams facing arson chaos in Amazon
The occupants of the military tents at this remote jungle camp in Brazil's wild west T survey the hellscape surrounding them.
"The horror of it' Trial of husband and 50 men accused of wife's rape shakes France
On the narrow streets of stone houses with pastel-blue shutters, residents of Mazan were appalled that this picturesque village in Provence was being referred to in the media as \"the village of the rapists\".
West End revival Will a traffic ban lure shoppers back to Oxford Street?
From the rooftop of John Lewis's flagship store, the London mayor, Sadiq Khan, laid out the changes planned for Oxford Street below: \"We want a public realm that is world class, green, healthy and safe but also increases footfall in the shops.\"
Live and let fly James Bond chopper firm awaits decision on £1bn deal
The Merlin helicopter sitting on a factory floor in Yeovil is a sight familiar to James Bond aficionados from the climactic shootout of the 2012 film Skyfall.
Mental illness is Britons' biggest health concern, survey finds
Mental health has overtaken cancer and obesity as the health issue that is the biggest cause of concern for most Britons, a global survey reveals.
Noise, crime, crowds Rise in tourism stokes tensions in bustling Lake District town
Even on a weekday afternoon at the very tail end of summer, Bowness-onWindermere is bustling with life. Outside the town's pubs and bars, drinkers sip lager and sparkling wine in the warm September sun.
EU's new proposals on youth mobility will put Starmer 'reset' to test
Fresh proposals to allow young people to move between Britain and the EU will be presented to the British government within weeks, in what is seen as a significant early test of Labour's \"reset\" in relations with Brussels.