Average wages grew at the fastest rate ever seen outside the pandemic.
However, surging inflation meant real income has still suffered one of the largest squeezes on record amid the cost of living crisis.
Growth in regular average total pay excluding bonuses rose 6.7pc in the final three months of last year, according to the Office for National Statistics.
Average pay in the private sector rose by 7.3pc during the period, which is also the largest ever seen outside the pandemic.
However in real terms, growth in total and regular pay fell over the course of the year by 3.1pc including bonuses and 2.5pc for regular pay excluding bonuses.
It is among the largest falls in growth since comparable records began in 2001.
The figures come as inflation runs at 10.5pc and may force the Bank of England to continue its programme of interest rate rises to stop higher costs becoming embedded as wages strive to keep pace with rising prices.
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What happened overnight
Tokyo shares ended higher following Wall Street gains, despite a lacklustre Japanese GDP report and a wait-and-see mood ahead of US consumer price data.
The benchmark Nikkei 225 index gained 0.7pc to end at 27,602.77, while the broader Topix index rose 0.8pc to 1,993.09.
Other Asian shares also edged higher, tracking the rebound on Wall Street ahead of a key US inflation report, while the yen recouped losses against a sluggish dollar as Japan nominated a new central bank governor in a closely watched decision.
MSCI’s broadest index of Asia-Pacific shares outside Japan rebounded 0.3pc.
Chinese shares wobbled, with the blue chips losing 0.4pc and Hong Kong’s Hang Seng Index easing 0.2pc.
Wall Street’s equity indexes closed higher ahead of today’s US consumer price index (CPI) report – key inflation data which will show whether price increases have slowed following the Federal Reserve’s interest rate hikes.
The Dow Jones Industrial Average finished up 1.1pc at 34,245.93. The broad-based S&P 500 rose 1.1 pc to 4,137.29, while the tech-focused Nasdaq Composite jumped 1.5pc to 11,891.79.
However, yields on the 10-year US Treasury bond dipped amid investor optimism that the CPI release will indicate cooling inflation, easing pressure on the Federal Reserve to continue interest hikes for much longer.
The FTSE 100 closed at a new high of 7,947.60, breaking the record for the third time this month. The pound rose to $1.21, compared with £1.20 at the previous close.
