Average pay rises climbed to a 15-year high of 3.7% at the end of last year.
Pay analysts IRS said wage rises increased by 0.3% in the final few months of 2007 to their highest level since November 1992.
Basic pay awards in the last few months of the year ranged from 2.5% to 6.7%, according to a study of more than 60 settlements covering more than 18,000 workers.
The increase was mainly due to pay rises being linked to the rate of inflation.
More than two-thirds of the deals were higher than a year ago, while average increases in private firms were 1% higher than those in the public sector at 3.5%.
Inflation was now on a downward trend, and deals in early January averaged 3.5%, the report noted.
Sheila Attwood of IRS said: "Higher inflation has been the key to some long-term deals at the end of 2007, pushing our headline settlement measure to a record high.
"However, a preview of early January 2008 awards reveals that deals are unlikely to be at the level recorded in December, but will be back to the 3.0% to 3.5% range seen through most of 2007."
