US consumer confidence defied expectations yesterday, rising sharply after five straight months of falls. The New York-based Conference Board private research group said its broad barometer of consumer attitudes rose to 117.0 in March from an upwardly revised February reading of 109.2, in a surprising report that knocked back growing expectations for interest rate cuts from the Federal Reserve before its May 15th meeting.

The news came shortly before President George W Bush urged lawmakers to support his plan to cut taxes by $1.6 trillion (€1.8 trillion) over 10 years, saying the "somewhat winded" US economy needed "urgent" help.

The consumer confidence data, which boosted the dollar and share values, reduces the likelihood of an imminent cut in US rates.

The Fed has recently said it is closely monitoring consumer spending, which has yet to suffer greatly from the sharp declines in confidence in recent months that have drawn comparisons to the last US recession in 1990-91.

The jump in confidence flew in the face of Wall Street forecasts for another sharp drop, to 104.5. The gain was driven by a near-13 point jump in consumers' expectations for the future - which have fallen the most in recent months. The data took financial markets by surprise, knocking down Treasury bonds, which had been pricing in another sharp decline in confidence, while stocks and the dollar gained.

"If people were building up their hopes that an inter-meeting 50 basis point interest rate cut by the Fed was going to happen in April, this diminishes those hopes somewhat," said Mr Mitch Stapley, chief fixed income officer at Kent Funds in Grand Rapids, Michigan.

The rise in confidence came despite massive losses in US equity prices this month.

"The recent weakness in the stock market has done little to dampen either consumers' assessment of present economic conditions or future expectations," said Ms Lynn Franco, director of the Conference Board's Consumer Research Centre.