Market research specialist Verdict predicted that spending in the fourth quarter would rise 2.2 per cent from the same period in 2012 to £88.4bn – the best since 2007 when fourth-quarter spending grew 3.1 per cent to £82.4bn.
Improving consumer confidence and job creation, along with a pick-up in the housing market, were some of the reasons cited by Verdict, which also pointed out that a baby boom during the recession meant consumers now have more children to buy Christmas presents for.
Government data indicates the outlook is improving for UK consumer spending, which generates about two-thirds of gross domestic product, but retailers are still wary as inflation continues to outpace wage rises.
Verdict also forecast a surge in online spending this year because Christmas Day falls on a Wednesday so consumers can use retailers’ online click-and-collect services to pick up goods ordered online as late as Monday 23 December.
The market research firm predicted online sales would jump 12 per cent to £11.6bn.
Overall it forecast £52bn would be spent on non-food items and £36.4bn spent on food.
Verdict said consumer confidence was also being lifted by events such as the awarding of compensation payments for mis-sold payment protection insurance (PPI) and windfalls from the flotation of the Royal Mail, which “have a further halo effect of boosting the view that at last things are getting better”.
Electronics are expected to feature high on the list of purchases, driven by an updated Google Nexus 7, the Tesco Hudl and the expected update to Apple’s iPad – as well as the forthcoming Microsoft Xbox One and Sony PlayStation 4.