The head of Next, Britain's No 2 fashion retailer, said a further deterioration in European sovereign finances represents "the biggest unknown risk" to his business.
"At the moment what's going on with the sovereign debt crisis in Europe isn't affecting consumers," Chief Executive Simon Wolfson told Reuters on Wednesday.
"There's a chance it could happen, of course ... It's not going to be good news but on the other hand it's unlikely to dramatically affect the fundamentals such as inflation and employment," he said.
"But it almost inevitably would put a further squeeze on lending in the UK."
Wolfson, who was made a Conservative working peer in May, 2010, was speaking after Next raised its full-year profit guidance and posted an 8.5 percent rise in half-year profit.
With the caveat of no further shocks from worsening European sovereign finances he sees no reason for there to be any dramatic change in the UK consumer environment in 2011.
He anticipates that by the second quarter of 2012 there will be some recovery in the consumer environment as inflationary pressures moderate.
He said Next has already negotiated a third of its prices for spring and is confident there will be little or no increases in its selling prices in the first half of 2012.
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