House prices and retail sales rise

LONDON (Reuters) - House prices in England and Wales rose last month at their strongest rate in almost three years, while British retail sales grew at their fastest annual pace since April, surveys showed on Tuesday.

The data will fuel hopes Britain is emerging from its longest recession since World War Two. The government, facing an election by next June and trailing in opinion polls, has said it expects growth to return by the end of the year.

A separate survey for the Times newspaper said Britons were more optimistic about the economy than at any time for the past 18 months.

However, the risks to the economy were underlined by Fitch Ratings agency which warned the nation was most at risk of losing its top-notch rating among major economies.

House prices were buoyed by tight supply and record low interest rates, the Royal Institution of Chartered Surveyors survey said.

It said 34 percent more surveyors reported price rises in the three months to October than price falls, up from a revised 21 in September.

That beat the consensus forecast for a reading of 28 and was the highest since December 2006, when Britain's economy was booming and house prices were rising at a double-digit rate.

The findings tally with surveys from mortgage lenders which show property prices have recovered strongly in recent months after losing as much as a fifth of their value during last year.

RETAIL SALES