Spending in Oxfordshire shops has risen and traders are "cautiously optimistic" about the future.

Bill McCardle, of Thames Valley Chamber of Commerce, said: "People were spending more than last year all the way through December, and the January sales have been shorter.

"I think that is a sign that the retail sector is having a good year.

"Leading up to Christmas they were quite concerned about whether people's spending would hold up, but spending has risen, with credit card spending really going up -- not just in Oxford, but across the Thames Valley region."

Jim Harris, of the recently revamped Castle Quay Shopping Centre, in Banbury, said nearly 80,000 cars had used its car park in December, compared with 50,000 in 2000.

He added: "Many of these were new people who had not previously shopped in Banbury. The January figures are 34 per cent up on last year. Everyone seemed to have good sales as well.

"Banbury's population is only 45,000, so the figures show that we're now a real regional centre, used as an alternative to Oxford, Coventry, Milton Keynes or Northampton."

Martin Stott, head of external policy and partnerships for Oxfordshire County Council, said the local economy was buoyant. Jobless figures had remained stable, despite a rise in the national figure.

He said: "It's good news for Oxfordshire and a testament to the value of having such a diverse local economy."

He said the county's wide range of industries, including printing and publishing, medical research, motorsport, tourism and agriculture, had reduced the effect of the September 11 terrorist attacks in the US and foot and mouth disease.

He added: "These trends are good for the economy. As unemployment levels fall, the amount of money spent in Oxfordshire shops has risen, a fact confirmed by the figures for Christmas sales. It also means that there are more job opportunities available."

He said that, on average, five out of six people who were unemployed in 1993 in Oxfordshire now had jobs.