Shoppers shrug off the gloom

Shoppers are spending their way out of a possible recession in what is shaping up to be a bumper Christmas for high street retailers.

While Germany suffers its worst recession for 20 years, city experts believe the determination of British consumers to keep spending will reinforce the UK's position as one of the strongest western economies.

Shrugging off the 11 September atrocities, consumers are expected to spend more than 1.5 per cent above last year's figure even though 41 per cent of those interviewed for Deloitte & Touche's annual Christmas survey said they felt gloomy about the economy.

More than three-quarters (77 per cent) of retailers expect sales to increase even though 47 per cent believe the economy is getting worse.

Richard Lloyd-Owen, head of consumer business at Deloitte & Touche, which commissioned the NOP Consumer survey of 1,000 adults and 600 retailers, said: "Consumer spending has been propping up the economy and retailers have had a good year with sales growth up eight per cent on the previous year. While December growth will be much more modest, Christmas will still make up the majority of some retailers' annual sales. Consumers are just more likely to be sensible rather than over-indulgent."