The world’s second largest tobacco company today said the number of smokers cutting back in the economic downturn was moderating.

British American Tobacco (BAT), which has more than 300 brands, said cigarette volumes were down 0.6% year-on-year at 523 billion in the nine months to September 30, compared to a 1% drop last year.

The group said its four core brands - Lucky Strike, Pall Mall, Kent and Dunhill - were up 8%, despite excise-driven price increases and the threat of illegal trade.

Nicandro Durante, BAT chief executive, said: "While the challenging economic conditions continued to impact consumers in some markets, other markets are showing signs of recovery."