This Christmas will be the best for retailers since 2007 and sales are likely to rise 1.9% to £85.2bn.

Online retailers are expected to take the lion’s share of the anticipated £1.6bn year-on-year increase in spend as their sales rise 17.6% to £8.1bn, according to analysis by retail research house Verdict.

The overall sales rise includes VAT, which rose from 15% to 17.5% at the start of this year.

Fashion, food and health and beauty retailers are likely to experience the biggest sales rises, partly helped by price inflation in those categories.

Verdict lead analyst Maureen Hinton said: “Though online is such a major factor in sustaining growth, the fact so many retailers are now online means that even this channel is becoming more crowded and competitive.

“Those retailers we trust, such as John Lewis, Marks & Spencer and Next, that provide a range of multichannel options for buying, delivery and exchange are the winners at Christmas, as well as specialists with unique ranges such as The White Company.”

Some retail sectors however, such as electricals, are likely to suffer a sales shrink at Christmas because of factors including price deflation and tough comparatives in categories such as televisions.