Fashion chain Next has seen fourth quarter sales “significantly” ahead of expectations, leading the firm to raise its profit forecasts for the year.

Next said that the 11.9% rise in sales between November 1st and December 24th was led by improvements in its seasonal knitwear, nightwear and gift ranges. Meanwhile, as a result of the strong run into Christmas, total stock for the chain’s famous end of season sale was down 11.5% on last year.

In regards to the ongoing consumer environment, Next said: “As far as the consumer environment is concerned, it seems likely that the economy will continue to steadily improve with strong employment numbers driving a general recovery.  However, the problem of little or no growth in real earnings looks set to persist for some time, and we cannot see any reason to expect a significant increase in total consumer spending in the year ahead.  We are also wary that any return to significant economic growth is likely to result in rising interest rates which, in turn, is likely to moderate spending of those with mortgages.”