Brown to offer help to homeowners in fightback

By Adrian Croft

LONDON (Reuters) - Prime Minister Gordon Brown will set out plans on Wednesday to shore up the troubled housing market in a drive to reverse a slide in his government's popularity amid worrying economic signs.

Reforms of banking regulations, whose failings were exposed last year when the country suffered its first run on a major bank in more than a century, will also be among legislative proposals Brown will unveil at 12:30 p.m., his office said.

Brown, who succeeded Tony Blair less than a year ago, is battling to win back support of voters squeezed by rising food and energy prices as the economy slows and the global credit crunch raises the risk of a house price crash.

There was more bad economic news on Wednesday with data showing a rise in Britons claiming jobless benefits. The Bank of England also warned inflation would shoot up over the next year.

That came a day after Chancellor Alistair Darling announced an unexpected income tax cut for 22 million people to try to defuse a row over earlier tax changes that left some 5 million people worse off.

"It is exactly the right thing to do, especially at this stage of the economy, when a number of people are feeling pressure because of the increased bills they are facing when they're filling up their car at the pump or they see their food bills at the shops," Darling told BBC radio.

The government will be forced to borrow 2.7 billion pounds to pay for it, swelling its big budget deficit.

The opposition Conservative Party accused the government of seeking to buy votes ahead of a crucial election for a single parliamentary seat next week that the Conservatives could win.