British fashion retailer Next has raised its profit forecasts after better than expected trading.
The group said the consumer environment was 'more stable than expected' after unemployment rose less than predicted and shoppers benefited from low inflation and interest rates.
Next's like-for-like sales - which strip out the effects of new store openings - grew by 3.2% in the 22 weeks to December 24.
It now expects full-year profits of between £490m and £500m - ahead of its November outlook.
The retailer's positive figures came after John Lewis said it had notched up more than £500m in sales across its department stores in a record-breaking festive season.
Next added that its post-Christmas sale had 'gone well', but also sounded a cautionary note over 2010 and said the outlook was 'hard to gauge'.
The firm warned it 'does not necessarily expect the year ahead to be as good as the previous six months' as the scale of the action needed to tackle the UK's dire public finances threatens a consumer recovery.
Next added that possible tax hikes, British government spending cuts and rising interest rates could hit shoppers in 2010.
