Rishi Sunak warns public sector workers of new pay squeeze

Unions accuse chancellor of using smokescreen tactics to hide plans for pay restraint

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Rishi Sunak has warned public sector workers to expect a renewed squeeze on pay and ordered government departments to find cost savings in response to the economic shock unleashed by Covid-19.

Against the backdrop of rapidly rising public borrowing after the government pumped billions of pounds into its initial emergency response, the chancellor announced the launch of a comprehensive spending review to set out his longer-term priorities.