Online sales will help save the UK retail sector during the recession, according to new research from PayPal.

The PayPal UK Online Retail Report claims that UK online retail spend will increase by up £12bn by the end of 2011, offsetting the £8bn fall in high street sales that that is predicted to occur by 2011.

The online sector is one of the few areas that has continued to grow in the economic downturn and all small companies should have an online presence.

"Its phenomenal growth is not only forecast to deliver sales of as much as £21bn by 2011, but a £12bn increase will also ensure that the entire UK retail sector is growing again by the end of 2011," said Carl Scheible, managing director of PayPal UK.