In August, the retail sales climbed down 0.5% in comparison to July. It is for the first time after January that a fall has been witnessed by the retail sector, adding to the worries of a double dip recession.

The Office For National Statistics brought out the figures for industries in retail sector. Non-food stores experienced the worst in the last month, with its sales dropping 0.7%. There was a decrease of 0.5% of sales in food stores.

The drop faced in the month of August indicates weak consumer spending. Next and John Lewis had already warned of such falls due to the reduction in the expenditure, which the Government is going to make the next month.

The non food sector has been hit hardly by the higher cotton prices. Also, VAT is going to get increased to 20% from the next January.

"The unexpected 0.5% fall in retail sales in August is a nasty shock and deals a significant blow to growth hopes”, said Howard Archer, top economist at IHS Global Insight. He added that the situation alarms for a double dip recession initiated by consumer cut in spending.

As expressed by Vicky Redwood, at Capital Economics, the decline in the retail sector sale in the August showed that the end for the consumer spending was nearing, which was astonishing. But, she also advised not to rely too much on the figures of one month.

The fall had happened in contrary to the Gfk and Nationwide consumer sentiment surveys, which had predicted an increase in the sales, as stated by Analyst James Knightley at ING bank.