Evidence emerged today that last month's cut in the cost of borrowing is already beginning to have an effect on consumer confidence, when Halifax, the mortgage lender, claimed that house prices rose in August at four times the rate of the previous month. The figures were "a real surprise", though, according to one senior economic analyst. As it published its latest house price index, Halifax said that property prices increased by 1.6 per cent last month after gaining just 0.4 per cent in July. The lender noted that this was the biggest monthly gain in prices since September last year, although it highlighted at the same time that the underlying trend in price growth is still very modest. Prices increased by just 2.1 per cent during the eight months to the end of August - well down on the 12.5 per cent increase during the same period last year. And annual house price inflation is running at just 2.5 per cent - way down on the 21.3 per cent annual growth at the same time last year. As the Halifax claimed that market activity is "improving somewhat", with the nation's economic fundamentals still "good", the bank directly attributed last month's price growth to the Bank's cut in interest rates from 4.75 per cent to 4.5 per cent. "The 1.6 per cent month-on-month jump in house prices in August is a real surprise," Howard Archer, chief economist at Global Insight, said. "However, there are often significant fluctuations in house prices on a monthly basis and we do not believe that it is a sign that house prices are about to start moving back up strongly." Although a price rise will be interpreted as good news for homeowners - particularly if it signals a kickstart to a housing market that has been lacklustre all year, all the evidence points, towards a price rise being temporary. Halifax itself said last month's price rise was "consistent" with changes in borrowers' behaviour in the wake of previous rate cuts by the Bank. Halifax said; "The pick-up in monthly house price growth in August seems to be consistent with a pattern established when the Bank of England implemented the first interest rate reductions during the two previous periods of rate cuts since 1997. "On both occasions, there was an up-tick in house prices in the month that the interest rate cut occurred; this proved to be a temporary phenomenon." At least one leading economist also questioned the trend as shown by the survey from Halifax, part of the HBOS banking group. Critics of house price surveys from mortgage lenders often then that they have a vested interest in talking up the strength of the market.