John Lewis , the biggest department store group, said sales jumped more than 10 percent last week, boosted by customer purchases of Christmas gifts and festive decorations for their homes.

The employee-owned group, seen as a retail bellwether, said on Sunday that department store sales rose to 133.1 million pounds in the week to December 17, the highest weekly level in the company's history.

The 10.6 percent rise in sales was a gross number, inclusive of VAT sales tax and new space contribution.

Analysts estimate sales had risen 3.6 percent, excluding VAT and new space.

The company said electronics, toys and home accessories as well as furnishings and Christmas decorations sold well during the week, with recent colder weather also lifting sales of coats.

The pick-up in sales at John Lewis contrasts with an otherwise dismal scene on the British High Street.

With consumers' disposable income being squeezed by rising prices, muted wages growth and government austerity measures, confidence is low and British retailers, nervous about spending in the key Christmas trading period, are discounting heavily.

(Reporting by Sarah Young)