Jeremy Hunt can afford public sector pay rises at March Budget, says IFS

Ditching fuel duty freeze could pay for more generous settlement, suggests think tank

Chancellor Jeremy Hunt (PA Wire)

Chancellor Jeremy Hunt could afford to give public sector workers a bigger pay rise at next month’s Budget month by scrapping plans for a fuel duty freeze, according to a leading think tank.

The Institute for Fiscal Studies (IFS) said short-term savings from the energy support scheme looking less costly than first feared would not alone pave the way for public sector pay to keep pace with inflation.

But Mr Hunt could dig deep into government pockets to help fund a one-off bonus for public sector workers in a bid to avert intensifying industrial action, according to the IFS report – with the UK on course to borrow £30bn less than forecast this year.