LONDON (Reuters) - Britain's public finances posted their first October deficit in 14 years, data showed yesterday, just days before finance minister Alistair Darling is expected to unveil costly measures to boost the economy.

The Office for National Statistics said the government posted a public-sector net borrowing requirement of £1.382 billion ($2.05 billion) for last month — the first October deficit in the measure since 1994.

October's figures are usually bolstered by corporation tax receipts, but these were flat compared with a year ago, while current expenditure was up five percent on the year.

Meanwhile, separate figures on retail sales showed some signs of weakening demand, although the headline figures belied a raft of gloomy reports from the High Street.

The pressure on government finances is set to increase amid growing indications that Darling will present eye-catching measures in his pre-budget report on Monday to help businesses and households weather a sharp economic downturn.

Some experts reckon the government's fiscal stimulus package could cost as much as £30 billion — roughly two percent of GDP — and could include help for small businesses as well as increased public investment.

Treasury minister Yvette Cooper defended plans to give a fiscal boost to the economy, saying Britain could suffer a slump comparable to that in the early 1980s if it didn't act.

"It's right to increase borrowing to support the economy and to boost the economy right now, because otherwise we'll see a recession that lasts longer and runs deeper and that will cost all of us more in the long run," she told Sky television.

As it is, Darling will have to tear up his previous borrowing forecast of £43 billion for the 2008/09 year, as borrowing so far has already hit £37 billion, the highest since records began in 1993.

He has already hinted that the government will suspend its rules that limit borrowing to 40 percent of GDP. Yesterday's figures showed that including the nationalisation of Northern Rock, public sector net debt in October was 42.9 percent of GDP.

The opposition Conservative party has attacked the government's plans to take on more debt to boost the economy, and analysts warn that while a stimulus package will prove popular with voters, it must still show it has a grip on finances.

Meanwhile, separate figures from the ONS showed retail sales were surprisingly resilient last month. Sales fell by a smaller-than-expected 0.1 percent in October, against forecasts for a 0.9 percent decline. Year-on-year, sales rose by 1.9 percent, against forecasts for 1.4 percent growth. The official measure of retail sales activity has pointed in the opposite direction from more gloomy evidence from retailers and other industry surveys. However, there were signs of marked weakness in the release.

Household goods stores sales were down 5.4 percent on the year, the worst reading since March 1992. Non-food store sales grew at their slowest rate since September 2005.

The figures were published as leading retailers Marks & Spencer and Debenhams held special discount days to entice Britons to start their Christmas shopping early.

"Discretionary spending is taking a hit," said Vicky Redwood, economist at Capital Economics. "What's more, anecdotal evidence suggests that the past couple of weeks have been even more shocking for retailers. It's shaping up to be a pretty awful Christmas for retailers."