The head of Next , Britain's No. 2 fashion retailer, said the Eurozone debt crisis has started to negatively impact consumer behaviour in the UK.

My sense is the underlying economic situation is slightly worse than it was in September and that the only thing that's really changed is the situation in Europe, Chief Executive Simon Wolfson told Reuters on Wednesday.

Wolfson, a prominent supporter of the ruling Conservative Party who sits in the upper house of Parliament, said the crisis had put the brakes on British employment growth and strongly affected consumer sentiment.

The (Eurozone) crisis got a lot worse in late November, through December, and I think the headlines were definitely worrying people in that time.

The CEO was speaking after Next published its Christmas trading statement.

The firm said it would meet profit forecasts for the year to end-January 2012 after total sales rose 3.1 percent in the August 1 to December 24 period.

However, Next said it was disappointed with sales in November and December as macro headwinds and high levels of competitor discounting took their toll.

Next has a long standing policy of not discounting prior to Christmas.

However, Wolfson said rivals discounting was more than I've ever seen before.

Shares in Next, which prior to Wednesday's update had risen 37 percent over the last year, were down 4.1 percent at 2,628 pence at 08:27 a.m. BT.

(Reporting by James Davey; editing by Kate Holton)