The British Retail Consortium (BRC) said that almost two-thirds of retailers in the United Kingdom expect Christmas sales to be the same or better than last year as stores accelerate their promotions and discounts to attract buyers ahead of a scheduled VAT increase.

According to the survey 35% of retailers said sales will be better than last year, 29% said they will be the same, and 36% expected a drop in sales. The more upbeat expectations come as 41% of retailers said they are offering more discounts than they did last year.

As part of the announced austerity measures to contain the biggest post-war budget deficit, the VAT is scheduled to rise with the start of 2011 to 20% from the current 17.5% further stimulating Britons to step up spending ahead of the increase in prices amid the holiday season. According to retailers 71% believe that customers are indeed stepping up their spending ahead of the VAT increase.

BRC emailed their results today; they conducted the survey between November 22 and December 01 on 17 retailers which represent 51% of the UK retail industry.