The recorded music market in the U.K. benefited from a strong showing in the fourth quarter of 2008, contributing to an overall volume decline of 3.2% in album sales year-on-year. Album sales fell from 138.1 million in 2007 to 133.6 million last year.

There had been fears of a much sharper decline, especially as a result of the slowdown in consumer spending and supply problems resulting from the failure of wholesale entertainment distributor EUK and independent distributor Pinnacle.

The figures from the Official Charts Co show that Q4 album sales were actually up 0.9% on the same period in 2007, from 49.4 million to 49.8 million units.

Big sellers in the fourth quarter included Take That's "The Circus" (Polydor), The Killers' "Day & Age" (Vertigo/Universal) and Pink's "Funhouse" (LaFace/Sony Music Entertainment). As previously reported, Duffy's "Rockferry" (A&M/Universal) was the biggest-selling album of the year, moving 1,684,944 copies.

The digital albums market grew during 2008, with 10.3 million units sold - a 65% increase compared to 2007. The format now represents 7.7% of the entire albums market.

Downloads were also the driver of an increase in the U.K. single tracks market, with total sales of 115.1 million, up 33% on the previous year's total of 86.6 million. The vast majority of this was digital - physical single sales fell 43.5% to 4.8 million.

"Every business and consumer in the U.K. is having a tough time, and these difficult trading conditions make the resilience of the U.K.'s music market all the more notable," said Geoff Taylor, chief executive of labels trade body the BPI, in a statement. "During a recession, people look for purchases that are excellent value for money and bring a lot of enjoyment, and music does just this.

He added: "A strong release schedule and a digital retail market that continues to diversify and grow helped the business confront the challenges of unlawful P2P and disruption to retail supply to deliver what are, in context, encouraging sales figures in 2008.

"The challenge for music companies in 2009 is to ensure that artist investment continues to remain profitable, as the way consumers discover and enjoy music continues to go through a period of unprecedented change."

The Entertainment Retailers Association (ERA) also issued a statement saying that 2008 sales figures show its members sold more DVDs, games and music combined than ever before. Combined sales across the three sectors reached 485.8 million units in 2008 - 4% up on 2007, according to the OCC and Chart Track.

The fastest-growing sector was computer games which saw unit sales grow 17% to 82.8 million units, driven by the popularity of console titles. In video, the high definition Blu Ray format saw sales grow 358% to 3.7 million units, while DVD sales achieved growth of 1.9% to reach 252.9 million units.

ERA Director General Kim Bayley said in a statement: "Against a dismal economic background and faced with the loss of the industry's biggest wholesaler, Entertainment U.K., right in the middle of the vital pre-Christmas sales period, entertainment retailers have delivered remarkably positive results.

"Consumers are sending us a strong message that the best insurance against recession is hit product delivered on a wide range of formats."