By Jonathan Davies

Private sector pay is expected to grow faster than public sector pay in the next four years, according to the Institute of Fiscal Studies (IFS).

The report indicated that the pay gap between the two sectors had now returned to its pre-crisis levels, with the gap expected to grow in the next few years.

IFS said there was little difference between pay in the private and public sectors for men, but women in the public sector are paid, on average, 8% more than in the private sector.

The research found that between 2008 and 2010, private sector pay fell in real terms faster than the public sector. But since 2010, that has reversed with public sector pay falling faster due to freezes and the growing cost of living.

The IFS said in its report: "If correct, this (The Office for Budget Responsibility's forecast of private sector pay rising faster than the public sector) implies that the gap between public and private sector pay levels will fall back to levels last seen in the late 1990s and early 2000s, when there were recruitment and retention problems in parts of the public sector."

Frances O'Grady, general secretary of the TUC, said: "The pay squeeze looks set to go on and on, which will not only make public sector workers suffer further years of cuts in their living standards, but also hit the quality of the services that bind our society together."

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