Public sector workers and members of the armed forces are to find out on Thursday by how much their pay will increase in the next financial year.
Ministers are expected to announce if recommendations from pay review bodies will be accepted.
Unions representing NHS staff urged the government to approve a "fair" rise and not ignore their recommendations.
The government is understood to want the increase in public service pay be to be limited to an average of 1%.
It would be the second successive year such an increase had been announced.
Ministers have argued that a below-inflation rise for many public sector workers in the current pay round has saved the government £12bn and helped to protect jobs.
Along with the NHS, the decision will affect those in the senior civil service, the judiciary, the armed forces and the prison service.
'Working harder'Trade unions representing more than a million NHS staff across the UK said they wanted an adequate rise after two years of wage freezes followed by a 1% pay increase.
Concerns were raised however when Deputy Prime Minister Nick Clegg was asked in the Commons if the government planned to accept the NHS pay review body recommendations but refused to be drawn on the issue.
Jon Skewes, director for policy, employment relations and communications at the Royal College of Midwives, said: "For years now, midwives' pay has been falling way behind the cost of living.
"Midwives are working harder and harder every year with a rising birth rate and deserve a fair pay rise.
"We expect the chancellor to honour the NHS pay review body recommendation."
The Unison union also said its members would be "very angry" and "bitterly disappointed" if the government vetoed the recommendation.
A revaluation of departmental pension schemes will also be announced on Thursday but Treasury sources say civil servants' pension contributions will not have to go up and that the value of their pensions will not fall as a result.
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