Electricals to be star category
This year's Christmas retail sales will be better than last year, consultancy Verdict has forecast.

Sales for the final quarter are expected to reach£74.4 billion, compared to£72.1 million last year, representing a 3.3 per cent increase. The growth rate is significantly stronger than the 1.9 per cent rise experienced last year, despite the likely rise in interest rates widely feared to come later this month.

According to the study, increased consumer confidence, recent falls in petrol prices and a strong round of City bonuses are all contributing factors.

Electricals is set to be the star performer this Christmas, with the sector benefiting from a strong pipeline of affordable products. Clothing retailers are likely to struggle and online retailers are preparing for another record in Christmas sales.

Verdict expects the value of goods bought online in the fourth quarter to rise by 3.5 per cent, reaching£3.4 billion - 4.5 per cent of total Christmas spending.

However, the Christmas cheer will come with a sting in its tail - sharp rises in costs and competitive pricing mean that retailers' margins will be further squeezed.