LONDON, Nov 11 Reuters British publicsector employers now expect to raise pay faster than their privatesector counterparts for the first time since late 2020, after the new Labour government approved big publicsector pay rises funded in part by higher employer taxes.

The Chartered Institute of Personnel and Development said 2,000 employers surveyed from Sept. 18 to Oct. 9 reported that median expected pay rises for the coming 12 months in the public sector had risen to 4 from 2.5 the quarter before.

This took the public sector above the median for privatesector pay settlements, which held at 3.

Looking at the next three months alone, publicsector employers expected new settlements to raise pay by a median 5.

Significant public sector pay awards announced since the election, along with the additional public sector spending announced in the recent budget, have provided a welcome boost to public sector employers and workers, James Cockett, the CIPD39;s senior labour market economist, said.

Shortly after taking office in July, British finance minister Rachel Reeves announced pay rises of 4.756 for millions of publicsector workers.

During the pandemic, publicsector pay lagged behind both rises in the private sector and a sharp increase in inflation.

Cockett said privatesector firms now faced increased costs which would likely affect their hiring plans and wage setting.

Reeves on Oct. 30 unveiled the biggest tax increases since 1993, including a 25 billion pound 32…