A government minister has bluntly shot down prospects of pay rises to keep up with the soaring cost of living.

Treasury chief secretary Simon Clarke said pay demands which seek to match the spiraling rate of inflation risked creating a 1970s-style wage-price spiral, pushing the cost of food and other goods even higher.

His intervention comes as more than 40,000 rail staff prepare for a three-day strike that will cripple most of the UK’s transport system after last-ditch negotiations failed.

The RMT said it is ‘unacceptable for railway workers to either lose their jobs or face another year of a pay freeze’ when inflation is at a 40-year high of 9%.

Meanwhile, tens of thousands of workers are expected to march in central London on Saturday calling on the government to do more to tackle the cost of living crisis.

The protest has been organised by the TUC union, which claims workers have lost almost £20,000 since 2008 because pay has not kept up with inflation.

But Mr Clarke said Britons cannot have ‘unrealistic expectations around pay’ after inflation was forecast to rise again to 11% by autumn.

He said steep wage increases would ‘exacerbate the crisis’, telling The BBC: ‘There isn’t an automaticity between inflation and pay settlements and we need to be very careful to avoid fuelling an inflationary spiral in a way which actually is to everyone’s detriment if we allow it to run away from us.

‘If we end up in a world where we are saying all settlements try to match inflation or even exceed it then we are in a position where we are actually creating the conditions whereby those expectations become baked in, become self-fulfilling.

‘That is the inflationary risk.’

Teachers and nurses are among the public sector workers expected to march en masse at TUC’s protest today.

TUC said an expected 3% pay rise for NHS staff this year amounts to a real-terms pay cut of around £1,600 for nurses.

Meanwhile, the teaching union NASUWT said teachers were at the sharp end of the cost of living crisis, with the value of their pay plummeting by 19% over the past 12 years.

Mr Clarke ruled out a public sector pay freeze, but made clear any rise in wages would need to be held in check.

He said: ‘We are looking very carefully at what the pay review bodies are sending through to us. The early signs are encouraging. There is sensible progress being made.

‘We will have to wait for the full readout of those negotiations but when that concludes in a few weeks time I think a lot of workforces will see they are getting good pay offers and that is to be welcomed.’

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