People are more optimistic about the economy than at any time for the past 18 months, according to a Populus poll for The Times today.

Its findings come as the best October high street sales for seven years have fuelled hopes that a pre-Christmas surge in spending could confirm the country’s emergence from recession.

Sales rose at an annual rate of 3.8 per cent last month, up from 2.8 per cent in September. Overall sales values rose at their fastest rate since April.

Amid other signs of increasing confidence, the pound rose to a three-month high against the dollar and the FTSE 100 closed up 92.5 points, or 1.8 per cent, at a two-week high.

At the same time The Times understands that Alistair Darling is looking to cut business taxes next month in an effort to convince voters that Labour should be trusted to oversee the recovery. A Pre-Budget Report (PBR) pencilled in for December 9 will be presented as a strategy for growth. The Chancellor is considering measures to help small and medium-sized firms, officials confirmed.

Proposals for a national investment corporation that will pump public cash into “high growth and innovative” enterprises are being drawn up as part of the new strategy.

Today’s poll will boost government hopes that voters may be feeling more positive by the time of the general election next spring. It shows that the number of voters thinking the country as a whole will do well over the next year has risen from a quarter to a third since July and is now the highest since April 2008. But nearly two thirds still think that the country will do badly over the next year.

People have always been more optimistic about the outlook for them and their families than about the economy as a whole. More think they will do well rather than badly in the next year, by 50 per cent to 46 per cent, against a similar balance, 46 per cent to 52 per cent, the other way in July.

Women are more pessimistic than men, and those living in the South East of England are twice as optimistic as those in the Midlands, Wales and the South West. This applies both to the general economic outlook and to family prospects. Moreover, middle-class people are more optimistic than unskilled workers, though the gap has narrowed since July.

The timing of the PBR is related to the publication on November 25 of revised output figures for the third quarter. The original figures sparked surprise by suggesting that the UK was still in recession, and ministers hope that the revised ones may show recovery has started.

The Treasury will justify spending billions of pounds on extra support for business on the ground that there is no other way to nurture a recovery expected to be fragile.

Populus interviewed a random sample of 1,504 adults aged over 18 by telephone between November 6 and 8. Interviews were conducted across the country and the results have been weighted to be representative of all adults. For more details go to www.populus.co.uk.

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