Public sector worker wage increases will be limited to the poorest paid, the chancellor has announced this afternoon.

As part of the Spending Review, Rishi Sunak said 2.1 million people earning less than the median salary of £24,000 will receive a pay increase of at least £250 while one million nurses, doctors and other NHS staff will also receive a pay rise.

However, pay will be frozen for the rest of the public sector.

Mr Sunak said it was in the interests of ‘fairness' that resources would be ‘targeted at those who need it most'.

He pointed out that private sector wages fell 1% between March and September while public sector pay rose by 4%.

He said: ‘In such a difficult context for the private sector I cannot justify a significant, across-the-board pay increase for all public sector workers.

‘The majority of public sector workers will see their pay increase next year.'

Mr Sunak also said that the National Living Wage will be increased by 2.2% to £8.91 per hour.

The Government has no formal role in the decisions around annual local government pay increases, which are developed through negotiations with the trade unions.