Healthy government finances and a booming economy have emboldened José Luis Rodríguez Zapatero, the Spanish prime minister, to promise tax cuts and a big rise in state pensions over the next two years.

With the economy growing at an annualised rate of 3.4 per cent, and a €7.4bn ($9.3bn, £5bn) fiscal surplus in the first seven months of the year, equivalent to 0.8 per cent of gross domestic product, Mr Zapatero told a miners' rally near León, his home town, that next year's budget would include the cuts and also more spending on housing, healthcare and education.