Downing Street has insisted its policy on the public sector pay cap remains unchanged after earlier appearing to signal that the current one per cent cap could be lifted.

A senior Number 10 source said at lunchtime that Theresa May had "heard the message" from the General Election that voters were "weary" of austerity and that the pay cap issue would be up for review in the Government's Autumn Statement later this year.

But Downing Street moved to clarify the situation this afternoon, with the Prime Minister’s official spokesman telling a Westminster media briefing this afternoon that “the policy has not changed”.

The spokesman said: "The government has been listening to the messages of the election. We are going through the normal processes of the recommendations of the panels and as and when they come back we will look at their findings.