Retailers are reporting a short term economic bounce back from Christmas and January sales plus online retail. John Lewis, the department store group that also owns the Waitrose supermarket chain; and clothing retailer Next have both reported good sales figures for the Christmas period from both their high street stores and e-commerce divisions.

John Lewis said revenues at its stores for the five weeks to 2 January 2010 were £500 million, with Waitrose reporting a sales increase of 20.8 per cent. Next said Christmas sales for the 22 weeks to Christmas Eve were up by 3.2 per cent for like-for-like sales, which includes its online sales.

Next reported that its online and catalogue outlet led the sales increase with an increase in sales of 6.8 per cent.

Fashion sales led the revival at John Lewis, up by 22 per cent, home ware sales increased by 19.6 per cent and electrical and technology goods by 11.4 per cent, the company reported in a statement.

Total sales at Next rose by 4.6 per cent, a like-for-like sales increase of 3.2 per cent.

Next tempered excitement about the recovery from the credit crisis in its statement stating: "The outlook for the year ahead is particularly hard to gauge at this point in the cycle. Consumers are generally in a much better position than they were a year ago. Low interest rates have enabled those in employment to service their debts and increase their savings - in November and December we saw a marked decline year on year in the number of our customers falling into arrears. The increase in unemployment has been lower than expected, as labour flexibility in the private sector has allowed employers to preserve more jobs than many thought possible. Crucially, the fall in employment has been much lower than the increase in unemployment, falling just 1.6% (463,000) since December 2007.

"However we do not necessarily expect the year ahead to be as good as the previous six months, partly because the fall in interest rates will annualise in the first quarter. More importantly the scale of the Public Sector deficit poses a real threat to recovery."