High street sales fell after a brief uplift in April but remained at the highest levels in nearly a year in a further sign that the worst of the recession is past.

About 31 per cent of retailers said that sales rose during the month, while 48 per cent reported a fall in sales. The resulting balance of minus 17 is down from plus 3 in April, when the figures were boosted by Easter.

However, there was mounting concern that a fall in prices will put additional downward pressure on inflation, which is already forecast to drop close to 0 per cent.

Retail prices index (RPI) inflation fell to minus 1.2 per cent in April, while the Bank of England's target measure of consumer prices index (CPI) inflation dropped from 2.9 per cent to 2.3 per cent. The Bank expects CPI inflation to fall below 1 per cent and to remain near 0 per cent until 2011.

The balance of retailers reporting that they raised, rather than cut, prices over the past year was 12, down from 38 in February.

Alan Clarke, UK economist at BNP Paribas, said: “Headline CPI inflation is going to be low this year due to energy price base effects. RPI inflation is already negative because of mortgage rate cuts and falling house price inflation. By contrast, the CBI survey that covers high street spending shows that, even stripping out influences such as energy and mortgage rates, price pressures are moribund.”

Vicky Redwood, of Capital Economics, said the gauge of sales volumes in the survey was “surprisingly strong, all things considered”.

But she warned that while high street sales were declining more slowly, spending in other sectors had plummeted. “The continued strength of the survey is not necessarily a sign that the overall economy is on a firm path to recovery,” she said.

Grocers and retailers selling footwear and leather goods both reported positive sales growth in May, although at a slower pace than the previous month. The hardware, china and DIY sectors saw flat sales growth in May, while sales of big-ticket household items, such as furniture and carpets, continued to fall.

Retailers are also circumspect about the outlook for June, with the balance expecting a fall, rather than a rise, in sales, edging down to minus 20 from minus 15.

Andy Clarke, chairman of the CBI Distributive Trades Panel, said: “Conditions were tough again in May for retailers, proving April's better sales figure was a temporary blip.

“Trading conditions are expected to remain difficult in June.”

However, there were signs that consumers remain more upbeat about the outlook for the economy. The consumer confidence index, compiled by GfK NOP, remained at minus 27 in May, after rising for the previous three months. This is the highest level in more than a year. Consumers' confidence in their own financial situation continued to improve, rising by two points to minus 1 in May.

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