David Prosser: Don't believe the retail industry when it says the high street is booming

Outlook: So is it going to be a Merry Christmas for Britain's retailers? The high street will be busy today, enabling retailers to say customers are flooding in. You'll see a flurry of claims about record sales, rising footfall and shortages of must-have goods. This is psychological warfare. Get the message out that everyone else is splurging, retailers reason, and reluctant shoppers will feel the need to join them.

The reality, however, is that the mood music, with two weeks to go to the big day, is melancholy. And with good reason. People aren't dim – they know their finances are about to get tighter. Energy bills and transport costs are rising. A VAT rise kicks in in January, with further tax hikes to follow in April. The outlook for jobs – let alone pay rises – is uncertain. And mortgage costs will not remain low for ever.

The retail sector hopes that, with tough times ahead, Christmas will encourage a last hurrah. Maybe those hopes will be realised, but don't count on it.

It is not what Legal & General, for example, is expecting. Its consumer research suggests 80 per cent of households plan to spend no more than last year and in many cases less. Nor is it anticipated by retailers such as HMV, which said this week that it is still waiting for the Christmas rush to begin. Two weeks of wintry weather have complicated the picture. The snow may explain why many retailers do not seem to be attracting as many shoppers as they had hoped. But it may also explain why online retailers are doing so well, in which case they are benefiting from money not spent in the shops, rather from a new stimulus.

Nationwide Building Society's surveys of consumer confidence have become progressively more gloomy in recent months. So too have GFK's. People have already begun to pull in their horns. There will be winners and losers this festive season, but don't believe the retail industry when it claims everyone is out splashing the cash – a good many people will not be.