CONSUMERS are continuing to spend on the high street and are using credit cards to fuel their buying, figures have revealed.

Data out yesterday showed Britain's high streets are still in a robust state, with the CBI's monthly survey reporting that sales in March were strong, which came after official figures for February showed a surge in retail sales.

However, the CBI's survey said the annual rate of increase in sales had fallen from the peaks seen over the festive period.

Ian McCafferty, CBI chief economic advisor, said: ''Shop sales have dropped down a gear. They are still strong but they have edged down from the peaks seen at Christmas and the New Year.''

The data came as it emerged consumers borrowed a record amount on their plastic during February.

Figures from the Bank of England showed individuals borrowed £9.21bn on their plastic in February, the highest figure since records began in 1993.

Overall consumer credit, which includes credit cards, loans and hire purchase agreements but not mortgage lending, grew by £1.85bn or 1.3 per cent.

In addition, Britain's battered manufacturing sector showed further signs of recovery, with a key industry barometer hitting its highest mark for a year.

The Chartered Institute of Purchasing and Supply's manufacturing activity index rose for the third month in succession to reach 50.7.

With a reading above 50 showing growth, the figure for March hints that dark days in the sector are over as clients look to rebuild inventories.

Experts warned that if the trend did not subside, it would force the Bank of England's Monetary Policy Committee to act sooner rather than later in raising interest rates levels.

The Bank of England's next decision on interest rates will be announced tomorrow, and economists expect the cost of borrowing to be held at four per cent for the fifth month in a row.