PUBLIC EXPENDITURE MINISTER Michael McGrath has confirmed that formal public service pay talks between the Government and unions have begun.

Exploratory talks had been taking place around the pay for 350,000 people who work in the public sector against a backdrop of rising inflation.

Following today’s Cabinet meeting, the Minister said he believes that there is now a basis for entering into formal talks.

“I advised my Cabinet colleagues this morning that I am of the view that there exists a basis for formal negotiations to now take place,” McGrath said in a statement.

Cabinet has agreed to the proposal and discussions will be facilitated by the Workplace Relations Commission (WRC) commencing next week.

“I recognise that these will be very challenging negotiations given the impact high levels of inflation are having on living standards of workers but also because of the uncertainty in the global economic outlook,” he continued.

“My aim in these talks will be to strike the right balance and seek to achieve a deal that is fair and affordable to both taxpayers generally and public service employees.

“Given the confidential nature of the process I will not be commenting further during the negotiation period.”

Under the Building Momentum Public Sector Pay Agreement, public sector workers received a 1% pay increase last year. They are due to receive a further 1% increase in October.

In March, unions triggered the agreements’ review clause due to the increasing cost of living. 

New figures from the Central Statistics Office (CSO) show inflation is now at a 38-year high.

Irish consumer prices increased by an average of 7.8% in the 12 months to May, up from 7% in the year to April.

It’s the largest annual increase in the consumer price index since 1984, when annual inflation was marginally higher at 7.9%