Britons' take-home pay grew at its slowest rate for two years during 2007, rising by only 3.5 per cent, new figures show.

VocaLink, which processes 90 per cent of UK salaries, said the rise was well down on the increase of 4.1 per cent seen in 2006 and a jump of 4.6 per cent in 2005.

Richard Cooper, head of brand and communications at VocaLink, said: "The VocaLink take-home pay index annual figure for 2007 reflects the year's turbulent economic state.

"This climate looks set to continue into the new year as the global credit crunch, rising energy prices and a cooling housing market take their toll."

The annual rate at which take-home pay is increasing edged up slightly during the three months to the end of December to 3.4 per cent, compared with 3.2 per cent in the three months to the end of November.

The rise was mainly driven by the manufacturing sector, with workers at these firms receiving an average of 3.3 per cent more pay in December compared with a year earlier, up from an annual growth rate of 2.9 per cent in November.

It was the first time the rate had increased for manufacturing since June, when it peaked at 4.8 per cent.

Douglas McWilliams, chief executive of economics consultancy cebr, which analyses the index for VocaLink, said: "With 2007 showing the lowest growth in take-home pay for two years, we believe the Bank of England will cut interest rates again in the first quarter of 2008, to help the indebted consumer."