The modern British Christmas was invented during the early Victorian period, and much of the rise in popularity is down to one man and his writing--Charles Dickens.
Prior to the mid 1830s when Dickens works were first being published, Christmas is a barely mentioned holiday. In 1824, for example The Gentleman's Magazine dismissed Christmas as being for the middling ranks. In 1833, the Charlton Club scheduled a regular committee meeting on December 25th. Only three attended. After such works as Sketches by Boz and A Christmas Carol, Christmas becomes much more widely celebrated. Christmas becomes fashionable, although certain thigns like trains run on Christmas day through out the period.
Uutil the 1830s, the vast majority of holiday celebrations took place on twelfth night or Epiphany with its Lord of Misrule and associated high jinks. With the advent of early Victorians and their emphasis on the family and charitable work, many Christmas traditions were begun and disseminated to a wider public.
Part of this may be due to Queen Victoria marrying Prince Albert, the German tradition was far more firmly focussed on Christmas Eve than twelfth night, but part was also a desire to bind the populace together and to bring about more of a community spirit. This drive for community spirit also led PrinceAlbert t be one of the main instigators of the Great Exhibition in 1851.
However, it is sometimes mistakenly assumed that Prince Albert introduced the Christmas tree to Britain. The first Christmas tree was recorded in 1789 with regard to the court of Queen Charlotte. There is silence for forty-two years, and then in 1831, a Swiss governess mentions a Christmas tree that her employers are setting in Durham. In Manchester around the same period, an observer wrote of pine tree tops being taken to market so that German merchants could decorate their homes. In 1845, the Illustrated London News takes the time to explain the custom to its readers. The Christmas tree really takes off in 1854, when Charles Dickens publishes a work where the Christmas tree, being adorned with packages has pride of place. His earlier work, A Christmas Carol has no such scene.
Christmas carols were also revived during this period. Both the early collectors of carols --David Gilbert and William Sandys thought carols survived in only a few remote areas such as Cornwall ,and needed to be preserved. Up to the 1850s, carols generally meant poems or the lyrics. Music was optional. Hence the reason Dickens could call his novella a carol. It is only with the advent of the piano in the 1850s that carol singing was truly revived and many of today's best loved carols were set to their traditional music. For example In the Bleak Mid-Winter is from 1851.
So what did inspire Dickens to write A Christmas Carol? Could have it been the Poor Law Board's instruction that workhouses ust not expect any work save housework by paupers in 1842? By 1847, the Board is allowing the workhouses to dole out extra food to inmates if they so desire. After the publication of A Christmas Carol, there is a big upsurge in the number of Christmas feasts provided by charities. But Father Christmas in his red bishop robes does not make an appearance until the 1880s. Before then he was mostly called Old Christmas and dresssed in green. This goes some way to explaing why the Ghost of Christmas Present is dressed the way he is.
The first Christmas cracker appears in 1847 as a fire-cracker sweet and the n a Bang of Expectations, invented by a confectioner named Tom Smith. The firm still exists -- making crackers complete with paper hats, trinkets and bad jokes.
The first commerically produced Christmas card happened in 1843, and its popularity was fuelled by the Penny post. By 1878 some 4.5 million cards went through the postal system, approximately the same as the number of Valentine Day's cards sent.
If you wish to know more about how the early Victorians shaped the modern British Christmas, Consuming Passions by Judith Flanders ISBN 0-00717295-8 is an excellent place to start.