UK retail sales flattened in August from July as shoppers remained close fisted due to soaring unemployment and gloomy economic conditions.

Data compiled by the Office for National Statistics revealed that annual rate of rise in retail sales dropped to 2.1 per cent in August as compared with 2.9 per cent in July.

However, retail sales in August soared 2.1 per cent in august as compared with the same period of 2008.

The monthly increase of 0.2 per cent in retail sales was worse than analysts' projections of 2.8 per cent annual increase.

ONS said food stores witnessed a 0.7 per cent monthly rise, while non-food stores saw a decline of 0.6 per cent.

Textile, clothing and footwear sales dropped 1.3 per cent between July and August, with clothing stores leading the fall.

Increasing rate of unemployment is one of the main reasons behind worse-than-expected retail sales. It is important to note here that unemployment has recently hit 2.47- million mark.