Paranormal Activity, Oren Peli, 85 mins, (15)<br/>Bunny and the Bull, Paul King, 101 mins, (15)

Bumps, thumps and shaking chandeliers make for enjoyably hammy horror
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The Independent Culture

While Hollywood continually searches for new and ever more expensive ways to get our attention, what really makes the film industry sit up is the Holy Grail of the no-budget marvel.

The latest film to fit that bill, tipped as the new Blair Witch Project, is US horror cheapie Paranormal Activity, a literally home-made venture by one Oren Peli (he shot it in his own house), which has been championed by Steven Spielberg and acquired by Paramount in the United States. Costing no more than a reported $15,000 (roughly £9,000), the film has now grossed $106m. Now if I were sitting in an accountant's office in LA, I'd be thinking that that, rather than James Cameron's forthcoming 3D folly, is entertainment.

Distinguished by its single-minded and seemingly artless simplicity, Paranormal Activity wants to chill the viewers' blood, rather than spill the characters'. A pleasant youngish couple, who share the names of lead actors Katie Featherston and Micah Sloat, are having trouble with a supernatural visitation in their San Diego home. After losing a few nights' sleep to the odd unexplained creak, Micah buys a camcorder and attempts to capture the nuisance on video.

Framed as found footage, Paranormal Activity is purportedly shot entirely on Micah's camera – hand-held by day, in eerie night vision while the couple sleep. It is suggested more than once that the camera's presence will only antagonise the unwelcome guest, and of course that's exactly the case. We're in the same territory as those other mock-vérité chillers The Blair Witch Project and Cloverfield (one cheap, the other spending a fortune to simulate cheapness), the premise being that there wouldn't be anything to see if the characters weren't filming, and yet filming is the very worst thing they can do.

As in The Blair Witch Project, knowing amateurishness is both a likeable selling point and a key narrative element; but, unlike that grim fairy tale of the haunted woods, Peli's film spooks us by foregrounding the reassuringly mundane, with its setting of a brightly lit, featurelessly bland modern house. The characters are utterly ordinary, too: she's cheerful and somewhat matronly; he's a brash joker, excessively rational yet also keen to try out a Ouija board. (One tip we are offered: never leave a Ouija board unattended with the camera running.)

The couple's house incubus seems to be an old-fashioned, easily pleased guest: it enjoys nothing more than turning lights on and off. Don't expect CGI clouds of ectoplasm: the scares here are strictly bargain-basement, even reduced-for-clearance: a chandelier swings, a shadow looms and things go bump! – and then thump!, to ensure you're getting your money's worth. Peli's film revives the honourable tradition of chills-by-suggestion, whereby what we don't see is far scarier than what we do. In fact, the very eeriest moment is a lengthy shot in which we just gaze at an empty room, and dread what will come next.

And the approach really works: at least, it will if you're impressionable, eager to be spooked and able to see Paranormal Activity in a crowded cinema with some semi-drunken friends. The sceptical, or domestic DVD watchers, will just find themselves raising a jaded eyebrow.

Another example of game low-budgetry is Bunny and the Bull, a British comedy by Paul King, best known as the director of The Mighty Boosh. It's a rather blokey, tomfoolery-laden road comedy about a shy agoraphobic (Edward Hogg) and the brash friend (Simon Farnaby) who accompanies him on a trip around Europe. The joke is that the pair's journey essentially takes place in the reclusive Stephen's memory, without him leaving his flat: hence, such modestly tricksy devices as a bed that turns out to be a door leading to the next scene, and a sofa that the characters crawl through to watch their own adventures.

A film celebrating the joy of inventive cheapness (rather than actually a cheap film, considering its £1m budget), Bunny and the Bull revels in manifest illusionism. Much of the film resembles a table-top mock-up in an animator's studio (there is, in fact, a lot of very engaging animation on show) or a wilfully corny Hamley's Christmas window display. The overall effect is of a considerably more economical version of Jean-Pierre Jeunet, or a not quite so economical Michel Gondry: in other words, the film resembles an extended example of that school of music video that errs knowingly on the childlike side.

The visual panache is pleasingly crackpot, but that's about as far as the film goes. The central pair are oddly charmless – Hogg pallidly forlorn, Farnaby's hairy priapic doofus displaying a few too many second-hand Kramer traits – while the script is thinly stretched, at best reaching the level of Radio 4's hit-and-miss 6.30pm comedy slot. The show is stolen twice, once by an animated metal bull, once by half of the Boosh, Julian Barratt, as a hairy lover of dogs. Otherwise, passably cheap, but could be that bit more cheerful.