BBC News :
The larger-than-expected drop in sales volumes of 1.6% prompted fresh concerns over the state of the economy.
Sales across all retail sectors fell in August as households cut back in the face of rising prices.
One analyst suggested the figures showed the UK is already in recession.
Sterling fell more than 1% against the dollar to $1.1351 at one point, its lowest since 1985, following the release of the retail sales figures. The pound recovered later to climb above $1.14.
The pound has been falling against the US currency for most of the year, partly due to the strength of the dollar. A weak pound means Brits travelling overseas will find their spending money will not stretch as far.
This comes at a time when UK inflation, which is the rate at which prices rise, is running at a near 40-year high, despite slipping to 9.9% from July's 10.1%.
The Bank of England has predicted the UK will fall into recession towards the end of this year and it is expected to keep increasing interest rates in a bid to curb inflation.
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