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.
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.
BBC political correspondent Iain Watson said if the money were to come from existing budgets, cuts would have to be made elsewhere to fund the above inflation aspect of the pay increases.
“That is a big challenge for Theresa May’s successor,” he said. “Will they say the age of austerity is finished and fully fund them? Or will they say cuts will be have to be made virtually as soon as they take office?”
Gail Cartmail, assistant general secretary of the union Unite, said the pay rise would not “ease the wage pain of hard up workers”.
She added public workers “will not be fooled” by Mrs May’s attempt to “curry favour with an austerity hit workforce”.
Instead, she called for “a properly funded pay rise which tackled the pay misery of the last nine years”.
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