Retail sales in the UK unexpectedly fell by 0.9 percent in August, as consumer spending, particularly on food, declined in the month, data released by the Office for National Statistics, or ONS, showed, on Thursday. Analysts had expected retail sales to rise by 0.4 percent month-on-month, in August.

The annual growth rate in retail sales also slowed to 2.1 percent from July's 3 percent, as food-store sales, which declined 2.7 percent in August, weighed on total sales. However, on a quarter-on-quarter measure, sales volumes increased by 1.7 percent.

Analysts believe that although August's figures fell short of expectations, the underlying trend remains positive, Reuters reported.

"It's a disappointing outcome that has taken the wind out of the sails of sterling for now, but the underlying story still looks good," James Knightley, UK economist at ING, told Reuters.

The retail sector accounts for about 6 percent of UK's economy, which grew 0.7 percent in the second quarter of the year.