"We are going to listen to the message that was sent in the election. We understand people are weary after years of hard work to rebuild the economy," a senior source in May's Downing Street office said. "We're working through and looking at the recommendations from the pay review bodies that are coming in."
The Conservatives had expected to increase their majority in the election, but left-wing Labour leader Jeremy Corbyn energised voters with an offer of increased public sector investment. The Downing Street source said no decisions would be taken until the budget later this year, adding: "It's vitally important that we balance the books and live within our means."
Around five million workers employed in local authorities, schools, hospitals and job centres have seen their wages fall in real terms following two years of a pay freeze and four years with salaries capped at a below-inflation one percent. Labour tabled an amendment Wednesday to the Queen's Speech - the government's legislative agenda - calling for an end to the pay cap and cuts to the police and fire service budgets.
Ahead of the vote, expected at around 1800 GMT, Corbyn claimed austerity played a part in the blaze at the 24-storey Grenfell Tower in London earlier this month, in which 79 people are presumed dead. The external cladding is thought to have fuelled the flames, and tests on 120 similarly-tiled high-rises have all failed fire safety tests.
In a Commons debate with May, Corbyn highlighted budget cuts to fire services and local authorities, which are responsible for inspecting buildings.
Copyright Agence France-Presse, 2017