Popular releases from bands such as the Killers, Snow Patrol and Take That coupled with a digital boom boosted last year's music market beyond expectations, the BPI said today.

The body, which represents the recorded music business, said that throughout 2008 the UK single tracks market, driven by continued growth in download sales, grew by a third (33 per cent), the BPI said.

The UK albums market performed slightly better year-on-year than in the same period the previous year, up by 0.9 per cent. But UK albums sales generally went down by 3.2 per cent in 2008.

The digital albums market grew strongly, with 10 million sold - a 65 per cent increase compared with 2007.

The digital format now holds 7.7 per cent of the albums market as a whole.

BPI chief executive Geoff Taylor said: "Every business and consumer in the UK is having a tough time, and these difficult trading conditions make the resilience of the UK's music market all the more notable.

"During a recession, people look for purchases that are excellent value for money and bring a lot of enjoyment, and music does just this.

"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."

Alexandra Burke had the top-selling single last year - Hallelujah - while Duffy's Rockferry was the biggest-selling album, according to Official Charts Company data.

The BPI said that the strong demand for new releases means that although the physical supply chain has suffered due to economic conditions hitting retailers such as Woolworths and Zavvi, sales have migrated to supermarkets and to digital retailers and online stores.

The BPI also noted that for the first time in Grammy history, UK signed acts achieved a clean sweep in the Record of the Year category, with Leona Lewis, Adele, MIA, Coldplay, and Robert Plant & Alison Krauss in the running.

Coldplay were nominated for seven Grammy Awards, while Radiohead's In Rainbows was nominated for Album of the Year, and UK talents Adele and Duffy were both nominated for Best New Artist.

Kim Bayley, director general of the Entertainment Retailers Association, said: "Music performed better in UK stores in 2008 than anyone had expected.

"The fact that UK retailers sold more albums in the fourth quarter of 2008 than in 2007 is particularly striking."

"Given that they did so against the background of the collapse of Entertainment UK, a wholesaler supplying around 40% of UK unit sales is a real testament to the work put in by retailers and record companies to put in place alternative supply arrangements.

"The big lesson of 2008 is that if the music is strong enough and retailers work well with suppliers to get that product in-store, music fans will respond and buy in their droves."

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