British retail sales grew more strongly than expected last month, easing fears of a downturn in consumer spending.

Sales volumes grew by 0.6% in August compared with July, taking the annual growth rate up to 5%, the Office for National Statistics said.

The figures, which oustripped analysts' forecasts of a 0.4% monthly increase, reinforce the view that predictions of an imminent downturn in consumer spending over the summer were premature.

A slump in consumer spending, which is credited with staving off recession during last year's global economic downturn, would spell trouble for the wider economy.

Retail rebound

"The data are on the strong side of expectations, suggesting there is still life in the consumer sector," said Audrey Childe-Freeman, economist at CIBC Wood Grundy.

The ONS data tally with recent buoyant sales figures from High Street giants such as Tesco, William Morrisson, B&Q and Comet.

According to ONS, British shoppers spent an average of �4.2bn ($5.8bn) every week in August, 3.1% more than they did one year earlier.

British consumer spending has remained persistently high during the last two years, fuelled by low interest rates and high employment.

Manufacturing doldrums

The retail sector's resilient performance contrasts sharply with fresh signs of sluggishness in the manufacturing sector.

A separate survey from the Confederation of British Industry suggested that the manfuacturing recovery could be running out of steam, with 40% of factories reporting thinner than usual order books.

The CBI said business in the sector was more subdued than at any time since March, amid faltering overseas demand and continued weakness in the global economy.

"Uncertain global conditions and rising oil prices continue to be thorns in the side of the economic recovery," said CBI chief economic adviser Ian McCafferty.

Rate cut plea

Manufacturers, who began to emerge tentatively from a year-long recession in the spring, have been urging the Bank of England to cut interest rates in order to stimulate demand.

But Bank chiefs have shied away from doing so partly because they fear cheaper borrowing would encourage yet more consumer spending, fuelling inflation.

However, there were signs that consumer spending is starting to moderate, with sales growth for the three months to August showing little change from comparable figures released in July.