Upturn in private housing reverses 18-month trend

THE NUMBER of houses begun by private builders has registered the first quarter-on-quarter rise for more than 18 months, confirming reports by builders and lenders of a recovery in the housing market, write Heather Connon and Robert Chote.

Total starts, seasonally adjusted, in the first three months of this year were 44,400, up 6.5 per cent on a year ago. Private house builders' starts rose 4.6 per cent to 34,100.

But that was more than 17 per cent above the levels of the second half of 1992, and the first increase in private starts since the third quarter of 1991.

Elsewhere, City and academic economists are now more optimistic about economic growth this year than the Chancellor was in the Budget, according to the Treasury's latest compilation of independent predictions.

Last month's run of upbeat economic indicators saw independent economists raise their forecasts for growth this year to 1.4 per cent on average, compared with 1.2 per cent last month. The Treasury's Budget forecast was for 1.25 per cent growth.

The forecasters are slightly more pessimistic about inflation and the trade deficit this year, but are more hopeful on unemployment.

The pound yesterday recovered some of the ground lost on Monday, rising by half a point against a basket of other currencies to 80.4 per cent of its 1985 value.

Bottom Line, page 25