Shoppers continued to spend more for the sixth month running, boosted by online retail in the run up to the festive season.
Sales rose 1.2pc last month, compared to September, according to the Office for National Statistics (ONS), as consumers started their Christmas shopping early, encouraged by discounts offered by a range of shops.
Richard Lim, chief executive of Retail Economics, said spending power was fuelled by cancelled holidays, less commuting and fewer nights out, but the shift would come at the expense of sales later this year.
He added: “The second lockdown couldn't have come at a worse time for the sector. Many retailers have been hanging on by a thread, waiting to trade through Christmas to strengthen balance sheets and position themselves the best they can heading into 2021.”
It came as an index of consumer confidence from market research firm GfK fell from -33 to -31 last month, slightly better than economists’ expectations of a -34 reading.
Joe Staton, client strategy director at GfK, agreed that “the second lockdown couldn't have come at a worse time for the UK’s high-street retailers”.
“This will deal a blow to any future rebound because bullish consumer spending fuels the UK economy and low confidence is the enemy of recovery,” he added.
Separately, public sector borrowing from April to October was also the highest since records began in 1993 at £214.9bn, up £169.1bn last year, the ONS said.
For the month of October, public sector borrowing more than doubled from £10.8bn in October 2019 to £22.3bn last month. It was the highest figure for October on record.
Meanwhile, government tax receipts fell £2.7bn from last year to £39.7bn last month, driven down by falls in VAT, business rates and income tax.
Paul Dales, of Capital Economics, said the data showed the economy held up better than expected under tiered Covid restrictions. He warned, however, that the second lockdown that began this month is likely to spark a drop in retail sales and a rise in public borrowing.
Nonetheless, “the encouraging news on vaccines is improving the economic outlook for next year”.