A fall in workers' take-home pay will only hinder the nation's economic recovery further, according to Kent business leaders.

The warning comes amid news that workers in the private sector have seen the lowest growth in pay on record.

A survey by VocaLink FTSE 350, which is a measure of private sector earnings, said take home pay had fallen by 0.1 per cent to hit 0.5 per cent in the three months to February.

This is significantly below the annual rate of inflation of four per cent.

It places a big squeeze on UK households faced with both high inflation and a fall in disposable income.

Chairman of the Kent branch of the Institute of Directors David Philpott said: "It is clear from these statistics that everybody is feeling the pressures of the at best sluggish economic situation.

"With many businesses working below capacity there is little opportunity for overtime and many firms have had to put a freeze on salary increases, or even taken the decision to implement job sharing in order to retain staff.

"On the High Street many retailers are continuing to find times tough and once again this will have an impact on the salaries of their staff.

"It is not surprising therefore that take home pay is suffering which will further hinder the recovery."

Meanwhile, take-home pay for public sector workers still outstrips the growth seen in other sectors this month.

Annual growth settled at 1.3 per cent for the three months to February which is more than twice the 0.5 per cent seen for private sector workers on the FTSE 350 Take Home Pay Index.

However, this growth is likely to drop when a two-year pay freeze for public sector workers earning more than £21,000 starts in April 2011.

Vocalink chief executive Marion King said: "The findings corroborate Mervyn King's view that UK households are being subjected to the most prolonged squeeze on real incomes since the 1920s.

"With take home pay falling in real terms, the outlook for the consumer remains bleak this year and this could place significant downward pressure on growth."