ECONOMIC  pundits have  been straining  to spot the  green shoots  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 over- priced. The average UK  house price is still in  the region of £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-on- quarter 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.