Government offers pay rises to public sector workers to end disputes

• The government accepted recommendations of 6-7% pay rises for teachers, NHS staff, police, armed forces, and other public sector workers.
• Pay review bodies had recommended the increases but unions threatened further strike action over pay.
• The pay rises will cost billions and require budget reprioritization rather than extra borrowing.
• Most unions welcomed the deals and agreed to suspend strike plans, aiming to improve relations with the government.
• It remains unclear precisely how the pay rises will impact department budgets, taxes, inflation and the wider economy.

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