Recent gauges of Britain's economy, such as consumer confidence data, have suggested it could sidestep a prolonged recession which had been widely predicted last year.

"We've never thought that the downturn would be long-lasting," Next CEO Simon Wolfson told Reuters after the retailer reported full-year results.

"The genesis of the problem is a post-pandemic supply side squeeze," he said, pointing to reduced availability of factory capacity, constrained freight routes and higher fuel prices following Russia's invasion of Ukraine.

"As those supply side problems begin to ease, inflation is likely to ease, and as long as there's no structural damage to the economy we can see no reason why we shouldn't see quite a sharp recovery next year," he said.

Wolfson, also a peer of Britain's ruling Conservative Party who sits in the upper house of parliament, said the UK had "a big opportunity" if it tackled some of the longer term supply side issues it has, particularly in planning, economic migration and energy supply.

Next said it would not need to increase prices this year by as much as previously thought.

However higher costs for wages and energy are still expected to reduce its profit this year.

"The problem is if everyone else is talking about a force 10 hurricane, someone who says 'I think it's going to be a storm' is often accused of believing that it's going to be sunshine," said Wolfson.

"We're not optimists, but we're just not as pessimistic as many of the reports we read."

Looking to the outlook for Next's price inflation in 2024, he said on balance it was more likely to be lower than 3% than higher than 3%.