A public sector pay talks resume today in a bid to reach an agreement, the Government are preparing to make a new offer to unions.

Talks broke down at the Workplace Relations Commission (WRC) in June after the Government offered pay increases of 2.5% for 2021-2022 and a further 2.5% pay rise for next year.

But the Irish Congress of Trade Unions said the offer did not match the needs of its members hit by the highest price rises in nearly 40 years.

The offer came on top of a 2% rise already in place under the existing public sector pay agreement, delivering a cumulative rise of 7% and bringing the total cost of the pay deal to €2.3billion.

Earlier this month, the Minister for Public Expenditure and Reform Michael McGrath revealed he planned for talks to take place at the end of August.

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He said: "We will come forward with a revised offer. We are very conscious that living standards are under pressure for all workers."

Mr McGrath repeatedly said whatever pay deal is agreed, it will have to be fair to both public servants and taxpayers.

He has warned that while the Government wants industrial peace, it will not chase inflation. He has also said both sides will have to show flexibility. ICTU's Kevin Callinan told RTÉ the pay offer will need to be significantly improved if it is to be accepted by union members.

He said: "The Government side has taken over two months to reflect on its position. Increased and sustained inflation during that period has not made it easier to reach an outcome that unions can credibly put to ballots of workers struggling with soaring increases in the cost of fuel, food, housing, childcare and many other essentials.

"Minister McGrath has indicated that the Government will make an improved offer on Monday and we look forward to finding out if it will be enough to move towards an outcome that we can credibly put to workers in ballots."