Britons to trim gift spending

Presents may not be so generous this year

Britons are planning to tighten their belts this Christmas, according to a new survey.

Higher interest rate worries are expected to take their toll on how much people spend on Christmas gifts.

Money spent on presents is set to drop by £16 per person this year, according to Switch's annual cost of Christmas survey.

Overall we are expecting to spend £868 each on presents, accessories, and festive fare - just £6, or 1%, more than last year.

Seasonal spending

It is not only consumers who appear more cautious - UK retailers appear to be echoing the same view.

The reality is that consumers may well now be even more cautious than our survey suggest Nigel Turner, Switch

One in five of the 500 retailers who were questioned believed people would spend less this year.

The survey was conducted before the recent Bank of England's decision to increase the base rate by a quarter of a percentage point to 3.75%.

The move will add to borrowing costs for many British consumers - and could have an impact on how willing people are to part with their cash.

"What is interesting is that this survey was conducted a fortnight before the base rate went up to 3.75%," said Nigel Turner of Switch.

"So the reality is that consumers may well now be even more cautious than our survey suggest."

More people will be buying their Christmas food and drink on the Continent, according to the poll.

Nearly a quarter of those questioned were now doing some of their Christmas shopping overseas in order to cash in on often cheaper prices and favourable exchange rates.