Brown boost as economy 'bounces back'

The economy is bouncing back with house prices surging and public optimism mounting, reports suggest today.

The evidence of a rebound will cheer Chancellor Gordon Brown, whose spending plans have come under threat from a slump in growth.

But it is likely to deter the Bank of England from cutting interest rates further at its monthly policy meeting tomorrow.

Halifax, Britain's biggest mortgage lender, said today that house prices jumped by 1.3 per cent last month. A poll by Populus found that two-thirds of voters believed the economy would perform "very well" or "quite well" over the next 12 months.

Martin Weale, director of the National Institute for Economic and Social Research, said: "It seems that the economy is finally recovering."