A Government decision on pay for public sector workers is expected to be announced as junior doctors launch their longest walkout yet over the long-running wages dispute.

A 6-6.5% rise has been recommended by independent review bodies at a potential cost of £5 billion or more, reports have suggested.

Written statements listed on Thursday’s order paper show ministers are due to give updates on the NHS, police, teachers and the justice system – four areas at the dispute’s centre.

Any increases in pay may have to come from budget cuts rather than borrowing after Rishi Sunak made halving inflation this year one of his policy priorities, Chancellor Jeremy Hunt has suggested.

City of London Financial and Professional Services Dinner
Chancellor Jeremy Hunt has suggested any pay rises would have to come from budget cuts (PA)

It comes amid further signs of union discontent at the suggestion Mr Hunt and the Prime Minister could reject the recommendations of the independent pay review bodies.

Disruption to thousands of planned appointments is expected as junior doctors in England on Thursday started their longest walkout yet in protest over pay.

The strike started at 7am and ends at the same time on Tuesday.

Meanwhile, teachers from the NASUWT union in England plan to stage continuous action short of strikes starting in September, although its members could still walk out in the autumn if the row continues.

Reports in The Telegraph and Daily Mail suggest Mr Sunak will meet Mr Hunt shortly to make a decision on approving the recommendations.

Prime Minister Rishi Sunak
Prime Minister Rishi Sunak said ‘fairness’ for both workers and taxpayers will be at the heart of any decisions (PA)

Ministers would look at the proposals for the 2023/24 settlements “in the round” and had not made a “final decision”, Downing Street said.

Consumer Prices Index inflation peaked at 11.1% growth last year and was last reported at 8.7% for May.

Mr Hunt has ruled out pay rises funded through additional borrowing, urging workers during an appearance on ITV1’s Peston on Wednesday to “understand this difficult period”.

With the Government refusing to borrow more and no prospect of tax hikes to raise the money, wage increases could be denied or departmental budgets could be raided to fund them, potentially leading to service cuts to services.

Mr Sunak, speaking at the Nato summit in Vilnius, Lithuania, said: “We will be guided by a couple of principles: the first is fairness, fairness for our public sector workers because we want to make sure that they are rewarded fairly for their hard work, but also fairness for taxpayers who ultimately have to foot the bill for pay rises.”