The Office for Budget Responsibility (OBR) has reduced its forecast of public sector job losses for this Parliament from 490,000 to 330,000.
The OBR has also raised its growth forecast for the UK in 2010 from the 1.2 per cent seen in June to 1.8 per cent.
For 2011, predicted growth has been revised downwards from 2.3 per cent to 2.1 per cent and from 2.8 per cent to 2.6 per cent for 2012..
The British Retail Consortium says improved growth figures are good news but consistently weak retail results show how fragile that growth is.
British Retail Consortium Director General Stephen Robertson said: "Stronger growth is a good thing but the Chancellor should remain cautious. Weak retail figures show how uncertain growth is, even in a sector already producing new jobs.
"In real terms, retail sales have been down year-on-year every month since June. Consumer confidence continues to fall. People’s worries about job prospects and personal finances are mounting. The, very necessary, public sector cuts together with January’s VAT rise have still to hit.
"The Chancellor should use his, better than expected, position as an opportunity to ease tax burdens on businesses and householders and get back to the 80:20 balance between cuts/taxation he promised.
"Using any extra money he finds himself with to hold back next April’s business rates increases and to remove the £1 billion carbon reduction stealth tax he’s slapped on businesses would support retails’ dual role in growing jobs and the economy while holding down household bills."
The CBI found retail sales rose for a fifth consecutive month in November.
Meanwhile Tesco has predicted a best ever Christmas.
And Deloitte is predicting that shoppers will spend £8bn online in December, up 15 per cent on last year. It found 51 per cent of UK consumers plan to spend the same on gifts this Christmas with 20 per cent expecting to spend more.