Two million public sector workers are reportedly set to get a £2bn pay rise.
The Treasury will unveil the biggest public sector pay rise in six years as one of Theresa May’s final acts as prime minister, the Times reported.
Soldiers are set to get a 2.9% rise while teachers and other school staff will get 2.75%, police officers, dentists and consultants 2.5% and senior civil servants 2%.
It is thought the money will come from existing budgets.
The Treasury is expected to confirm the increases in an announcement on Monday.
Public sector pay cap to be lifted
‘Biggest pay rise in decade for 1m workers’
The workers – mostly in England only – will receive salary raises above the level of inflation as a departure from the public sector pay restrictions brought in by the coalition government.
Public sector pay was frozen for two years in 2010, except for those earning less than £21,000 a year, and after that rises were capped at 1% – below the rate of inflation.
Theresa May continued the cap until last year when she announced austerity was coming to an end.
The rises do not apply to other public sector staff, such as more junior civil servants and nurses, the Times added. Their pay is dealt with separately.
Paul Johnson, director of the Institute for Fiscal Studies think tank, said the proposals were similar to pay rises implemented last year.
He told BBC Radio 4’s Today programme that many of the pay increases were “only just” above inflation – which is currently at 2% – and were still slower than average pay rises in the private sector.
Both public and private sector workers have seen their average pay rising more slowly than prices since 2010.
Mr Johnson said it would be “difficult” to make the argument that funding would come from existing budgets – and therefore it would mean cuts elsewhere.
He said budgets for next year had not yet been set and he “would be surprised” if they do not increase.