U.K. retail sales declined as the London Olympics discouraged online shopping in August, and further dampened prospects of support from consumer spending to the economy. Retail sales, including auto fuel, fell 0.2 percent month-on-month in August, data from the Office for National Statistics showed Thursday. Economists had forecast a 0.3 percent drop following a similar 0.3 percent rise in July. Sales declined for the first time in four months. The major reason behind the decline was a 6.7 percent sharp fall in non-store retailing that predominantly comprise of online shopping. Food and non-food store sales climbed 0.2 percent each. The Olympic Games, however, boosted clothing and sporting goods sales in August. With consumer confidence still very weak and inflation set to outpace earnings growth for another six months or so, there is possibility of further falls in retail sales in the coming months, said Samuel Tombs, an economist at Capital Economics. IHS Global Insight's Chief UK economist Howard Archer also forecast sales to remain muted in the near term. Poor consumer confidence amid elevated concerns over the economy is set to limit the willingness of consumers to spend, on the top of the constraints on their ability to do so. Annually, sales volume advanced 2.7 percent, improving from July's 2.3 percent growth. But it was weaker than the expected 2.9 percent increase. The annual price deflator remained at 0.2 percent, the lowest since October 2009. Inflation fell to 2.5 percent in August. Nonetheless, the Bank of England minutes revealed that policymakers now expect inflation to take longer time to reach the 2 percent target. Excluding automotive fuel, retail sales volume fell 0.3 percent on a monthly basis, following no change in July, but in line with expectations, data showed. The annual rate of growth in sales, excluding auto fuel, accelerated to 3.1 percent from 2.8 percent in the previous month. This was, however, a tad below the 3.2 percent growth expected by economists. Read more: http://www.mt5.com/ar/forex_news/quickview/1303644/