LONDON (Reuters) - Annual growth in take-home pay fell to its lowest level in almost a year in December, sinking to 2.9 percent from 3.5 percent in November, data from payments company VocaLink showed on Wednesday.

A slump in Christmas bonus payments in the dominant services sector drove much of the slowdown in pay growth, which was 3.4 percent in December last year.

A separate survey of purchasing managers on Monday showed that the service sector continued to contract in December at almost the same record pace as the month before.

The falling rate of wage growth -- which VocaLink said was now below the rate of retail price inflation for two years running -- is likely to further banish price stability worries when the Bank of England starts a two-day interest rate meeting later on Wednesday.

Economists polled by Reuters expect the Bank of England to cut rates by at least half a percentage point to 1.5 percent on Thursday.

VocaLink calculates its data based on a sample of payments made by some of Britain's 350 largest publicly listed companies.

(Reporting by David Milliken; Editing by Kenneth Barry)