LONDON (Reuters) - British retail sales volumes grew for a third straight month in April, albeit at a slightly slower pace than expected, and retailers are confident of an acceleration next month, a survey showed yesterday.

But a sustained recovery in consumer spending could be prevented by signs in other data that the housing market may be running out of steam and the prospect of a squeeze on government spending and higher taxes in the near future.

The reported sales balance in the CBI's monthly distributive trades survey held steady at March's level of +13 in April, slightly below economists' forecast of a reading of +15 and retailers' own expectation of a +14 reading.

Sterling came under pressure on the foreign exchanges as investors speculated on a weaker outlook for the UK economy.

However, retailers reckoned sales growth would pick-up next month, with the expected sales balance for May rising to +17.