British shoppers hunt Christmas sale bargains before tax rise

Recession-hit Britons are rushing to snap up bargains in the traditional post-Christmas sales, but economists warn that a looming tax hike is also fuelling demand - and could stall economic recovery.

Many shops in Britain began slashing prices on Boxing Day in an attempt to shift old stock.

As a result, the total number of shoppers soared by almost 18.6 per cent on Saturday, compared with Boxing Day of the previous year, market research firm Experian said.

And on Sunday, the number of shoppers was 17.9 per cent higher than the equivalent day of 2008, as many retailers slashed their prices by between 75 and 90 per cent, according to Experian.

"It's been the strongest start to the post-Christmas sales we have seen for a number of years - if not ever," said Richard Dodd, spokesman for the British Retail Consortium, an industry body.

"The big question is, to what extent this momentum continues into the New Year and to what extent it is just an interlude in the gloom."

This year, cash-strapped shoppers are seeking to avoid a large tax rise which kicks in tomorrow.

One year ago, the British government had slashed VAT, or value added tax, to 15 per cent to help lift the battered economy out of recession and boost consumer spending.

The measure expires on January 1, when the taxation on goods and services will return to the previous level of 17.5 per cent.

James Bailey, manager of the Cabot Circus shopping centre in Bristol, southwestern England, said customers were keen to save the extra cash and snap up big-ticket items like jewellery, televisions and video game consoles.

"We are expecting to see a push on the larger-ticket items, like televisions, where the 2.5 per cent makes a difference - that is the feedback we are getting from customers," said Mr Bailey.

Norman Black, marketing director for the Brent Cross shopping centre in north London, agreed that big discounts and the VAT increase had prompted "mission shopping."

"The place is absolutely heaving," Mr Black said of Brent Cross, which contains 125 shops.

He added: "People are mission shopping. People who have clearly had their eye on things they want and have been saving for it all year and have now come to buy it in the sales."