Most of us would benefit from low prices.

Byline: Bill Gleeson

E CONOMIC pundits have been straining to spot the greenshoots for the best part of a year now. Surely the numerous predictions that an upturn is just round the corner are about to come true.

So far this week, we have seen a big rise in retail sales and evidence that the commercial property market is rising. Hopefully, when the current quarter's GDP figures are published in the New Year, we will see that the UK is out of recession.

But there are still crucial areas of economic activity that could be stuck in the doldrums for months, even years, to come.

Nationwide this week issued its forecasts for house prices, which make gloomy reading. All major housing market forecasters predict that prices will fall lower next year, wiping out the small gains seen in some parts of the country in the last six months.

As a nation, we will only start to really feel good again once house prices start to rise on a sustainable basis, which is a bit perverse.

Its perverse because houses are already overpriced.

The average UK house price is still in the region of pounds 160,000. In parts of Liverpool that sum only buys a pokey house that is too small to bring up a growing family in. If they only knew it, most people would benefit from lower, more affordable, house prices.

But I'm a lone voice. I understand that my idea counters the prevailing culture that celebrates rising values. The fact is that the fundamental demographics of our society, principally a growing population, means that, once banks resume normal service, property prices will surge.

The other big factor that must change before we begin to spend again is job security.

Potential house buyers have got to feel comfortable about their own economic outlook.

Those fearing redundancy, either now or in the future, won't be active in the housing market. Not unless it's a defensive move such as trading down.

TALKING about normal service resuming at banks, Barclays and HSBC yesterday gave hope things are looking up as they reported sharp quarter-onquarter falls in bad debt write-offs.

Third quarter figures from the UK's two top banks revealed a hike in underlying profits which was also due to strong investment banking performances as well as the improving picture for bad debt charges.

Barclays said a recovering global economy would see impairment charges for the year come in lower than first forecast, while HSBC's bad debts fell to their lowest level for more than a year.

This has got to be good news, as these write-offs are one of the principal causes of weaknesses undermining bank balance sheets. But not all of our banks have come up smelling of roses just yet. Barclays and HSBC's figures contrast with the fortunes of Royal Bank of Scotland and Lloyds Banking Group, with the latter announcing more job cuts yesterday.

On the upside, HSBC said the worst of the global economic crisis was over as it reported underlying third quarter profits "significantly ahead" of a year earlier.

Michael Geoghegan, group chief executive of HSBC, said "the biggest jolt has now passed", although he warned it was "too early to claim victory".

The acid test is whether these rising profits mean we have reached the point banks can stop squeezing borrowers for every penny and pay savers a worthwhile return.