Online sales in the UK are set to break the £40bn mark this year according to new research. This means that Internet shopping will account for 16 per cent of retail spending this year states the research from Uswitch.com.

The figures are based on Office for National Statistics retail data and also predict that UK online spending will rise to £162bn by 2020 accounting for 40 per cent of total retail sales.

Another report from Forrester Research forecasts online Christmas shopping will reach £13.8bn in the UK this year, the highest figure in Europe and a 42% increase on 2006.

Shoppers also spent a record £4.2bn online in July, up from £2.34bn in the same month last year. The continuing rise in online spending is attributed to more than three quarters of British homes now having broadband internet access.