Pay for the last quarter of 2008 went up by four times the rate of inflation.

In a survey by Industrial Relations Services, pay raises were at an average of 3.8 percent compared to the inflation-based Retail Price Index of 0.9 percent. This degree of difference has not been seen since August 1986.

The top 25 percent of pay rises saw an even bigger growth of 4.8 percent, up 0.3 percent on the third quarter of 2008.

There was also a big difference between the public and the private sector. The private sector stood firm with increases averaging 3.8 percent compared to the public sector which saw rises of 2.5 percent.

These hikes though are not expected to continue as new contracts are negotiated in January and the recession hits.

IRS Pay and Benefits editor, Sheila Attwood, said: "The record gap between pay rises and RPI inflation will narrow as we move through the year. There is already an early indication that pay deals in January are lower than those at the end of 2008, and we expect them to fall further as the year progresses. April pay awards could be down to 2.5 percent."