The Government is refusing to review a new cap on people’s benefits despite the soaring costs of goods in the wake of Brexit, a cabinet minister has confirmed.

Damian Green said he would not take into account rising prices in setting the level of the cap, which drops today from £26,000 to £23,000 in London and to £20,000 outside the capital.

The Work and Pensions Secretary’s admission came as major food producers confirmed struggling families could be hit by price rises due to the falling strength of the pound – it has plummeted 18 per cent against the US dollar since June's Brexit vote.

Asked whether the cap could be adjusted if inflation jumped above two and a half per cent, for example, Mr Green said: "There’s no intention to reconsider the cap".

He argued that the new cap is necessary to ensure that households on benefits do not earn more than those with individuals in work.

The new drop in annual limits on welfare payments to unemployed households was announced by George Osborne before he left the Treasury. It could lead to some families losing more than £100 a week.

Around 20,000 families are currently capped by an annual limit of £26,000, or £500 a week, on total household benefits, which was introduced in 2013.

The new lower cap is set to bring an explosion in the numbers affected to around 64,000 households.

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Nearly two thirds of those hit are single mothers, according to the GMB union.

For single people without children the cap will fall to £15,410 in Greater London and £13,400 across the rest of the UK.

According to the Department for Work and Pensions, the 23,500 households who previously had their benefits capped have moved into work since 2013.

But analysis by the Institute for Fiscal Studies suggests that "the majority of those affected will not respond" to the tougher cap by moving into work or moving house.

The most ridiculous reasons people had their benefits sanctioned Show all 16 1 /16 The most ridiculous reasons people had their benefits sanctioned The most ridiculous reasons people had their benefits sanctioned "One case where the claimant’s wife went into premature labour and had to go to hospital. This caused the claimant to miss an appointment. No leeway given" The most ridiculous reasons people had their benefits sanctioned "It’s Christmas Day and you don’t fill in your job search evidence form to show that you’ve looked for all the new jobs that are advertised on Christmas Day. You are sanctioned. Merry Christmas" The most ridiculous reasons people had their benefits sanctioned "You apply for three jobs one week and three jobs the following Sunday and Monday. Because the job centre week starts on a Tuesday it treats this as applying for six jobs in one week and none the following week. You are sanctioned for 13 weeks for failing to apply for three jobs each week" The most ridiculous reasons people had their benefits sanctioned "A London man missed his Jobcentre appointments for two weeks because he was in hospital after being hit by a car. He was sanctioned" 2011 Getty Images The most ridiculous reasons people had their benefits sanctioned "You’ve been unemployed for seven months and are forced onto a workfare scheme in a shop miles away, but can’t afford to travel. You offer to work in a nearer branch but are refused and get sanctioned for not attending your placement" 2013 Getty Images The most ridiculous reasons people had their benefits sanctioned "You are a mum of two, and are five minutes late for your job centre appointment. You show the advisor the clock on your phone, which is running late. You are sanctioned for a month" The most ridiculous reasons people had their benefits sanctioned "A man with heart problems who was on Employment and Support Allowance (ESA) had a heart attack during a work capability assessment. He was then sanctioned for failing to complete the assessment" Rex The most ridiculous reasons people had their benefits sanctioned "A man who had gotten a job that was scheduled to begin in two weeks’ time was sanctioned for not looking for work as he waited for the role to start" The most ridiculous reasons people had their benefits sanctioned "Army veteran Stephen Taylor, 60, whose Jobseeker’s Allowance (JSA) was stopped after he sold poppies in memory of fallen soldiers" 2014 Getty Images The most ridiculous reasons people had their benefits sanctioned "A man had to miss his regular appointment at the job centre to attend his father’s funeral. He was sanctioned even though he told DWP staff in advance" 2014 Getty Images The most ridiculous reasons people had their benefits sanctioned "Ceri Padley, 26, had her benefits sanctioned after she missed an appointment at the jobcentre - because she was at a job interview" Jason Doiy Photography The most ridiculous reasons people had their benefits sanctioned "A man got sanctioned for missing his slot to sign on - as he was attending a work programme interview. He was then sanctioned as he could not afford to travel for his job search" 2012 Getty Images The most ridiculous reasons people had their benefits sanctioned "Mother-of-three Angie Godwin, 27, said her benefits were sanctioned after she applied for a role job centre staff said was beyond her" The most ridiculous reasons people had their benefits sanctioned "Sofya Harrison was sanctioned for attending a job interview and moving her signing-on to another day" The most ridiculous reasons people had their benefits sanctioned "Michael, 54, had his benefits sanctioned for four months for failing to undertake a week’s work experience at a charity shop. The charity shop had told him they didn’t want him there" Getty The most ridiculous reasons people had their benefits sanctioned "Terry Eaton, 58, was sanctioned because he didn’t have the bus fare he needed to attend an appointment with the job centre" Getty Images

"For that majority it is an open question how they will adjust to the loss of income," it said in a report.

Walkers, owned by US giant PepsiCo, has said that "the weakened value of the pound" is affecting the import cost of some of its materials.

Birds Eye, owned by New York-listed Nomad Foods, says its products are priced in dollars, so the pound's fall means sterling costs have risen.