A snapshot survey of UK retailers suggests they are convinced that this Christmas will be no worse than last year, the British Retail Consortium (BRC) said today (11 December).

But they are also concerned that sales in the New Year will be harmed by the increase in the VAT rate to 17.5%, which the Chancellor has confirmed for 1 January.

"There's some good news here but we're not out of trouble yet," said BRC director general Stephen Robertson.

"I'm reassured that retailers are more confident about their prospects this Christmas but remember the comparison is with dramatic sales falls last year.

"There are more customers willing and able to spend now but, for many retailers, it's taking even more discounts to persuade them to buy."

42% of retailers responding to the BRC's Christmas Trading Snapshot Survey said this Christmas will be better than last year's.

The other 58% said sales would be the same as 2008, and none of the respondents thought sales will be worse.

Almost half of retailers expect greater discounting in the run-up to this Christmas; only a quarter expect less.

And 53% believe December's sales will be boosted by customers bringing their purchases forward to beat January's VAT increase.

"The impact of the VAT increase is a concern for half the respondents but other clouds are gathering. Customers are cautious. Jobs are a big worry and neither will be helped by the tax-battering promised by the Chancellor," Robertson added.