UK's Zahawi: higher public sector pay won't fuel inflation

Britain's biggest public-sector pay increases in nearly 20 years will not fuel inflation, finance minister Nadhim Zahawi said on Tuesday, in a speech where he said fighting inflation was "a moral imperative".

Earlier on Tuesday, Britain's government announced pay rises of about 4-5% for more than 2 million public-sector workers - more than in recent years but well below current consumer price inflation of more than 9%.

"We are finding a careful balance, providing the highest uplift in nearly 20 years without making inflationary pressures worse," Zahawi said at the City of London's annual Mansion House dinner.