Just last week it was announced millions of Brits could face a wage freeze to pay for the coronavirus pandemic.
It comes as Chancellor Rishi Sunak is looking for ways to pay for the amount spent this year due to the crisis.
Public sector workers will reportedly foot the bill, including soldiers, police officers, teachers and civil servants.
Now Mr Sunak has hinted at hiking up taxes by spring to tackle UK's debt caused by Covid-19.
He is poised to unveil a £100 billion plan for long-term infrastructure investment and a £3 billion package to support the NHS.
In an interview ahead with the Sunday Times, he warned the nation is experiencing an "economic shock".
He also told Sky News on Sunday: "You will not see austerity next week, what you will see is an increase in Government spending, on day-to-day public services, quite a significant one coming on the increase we had last year.
"So, there's absolutely no way in which anyone can say that's austerity, we're spending more money on public services than we were."
However, the Chancellor said that he "cannot comment on future pay policy" but it would be "reasonable to think" of public pay settlements.
He added: "I think it would be fair to also think about what is happening with wages, with jobs, with hours, across the economy when we think about what the right thing to do in the public sector is."
The scale of the problems in which the Chancellor faces were brought into focus on Saturday when he announced the UK's national debt reached a new high of £2.08 trillion.
It comes after the Government's borrowing hit a record £22.3 billion last month due to the coronavirus pandemic.
And it is on course to hit £350 billion this year as a result of the crippling crisis.
Mr Sunak continued: "People will see the scale of the economic shock laid bare. We can see the data every month, and obviously the shock that our economy is facing at the moment is significant."
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