In a report undermining Rishi Sunak's central argument against larger wage settlements, the Institute for Public Policy Research (IPPR) said raising pay by 10% on average for public sector workers would not add significantly to inflation.
Last week the prime minister announced a pay rise of at least 6% for millions of teachers, nurses, doctors and police, telling them the latest offer was "final" and there would be no more negotiations, despite the threat of further strike action.
Paul Nowak, the general secretary of the Trades Union Congress, said: "It is nonsense to blame workers for stubborn inflation when pay packets have been obliterated. Real wages have been falling for almost two years."
Sunak has argued that unions pushing for more are behaving like bullies with "unrealistic" demands that would damage government finances and make inflation worse.
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