Pound rises as property market optimism grows

Increasing optimism regarding the UK’s economic prospects has pushed the pound above $1.50 for the first time in four months yesterday.

Sterling reached $1.503 before falling back slightly, following the release of new reports which indicated an imminent recovery in the troubled property sector.

The Royal Institution of Chartered Surveyors said that 31 per cent more members reported a rise, rather than a fall, in customer enquiries in March.

Meanwhile, the Council of Mortgage Lenders had detected a rise in loan approvals numbers for the previous month - hinting that buyers were being tempted back into the market following months of falling house prices.

The pound also touched a six-week high against the euro yesterday.

Sterling has weakened dramatically over recent months on investor concerns that the UK is facing a sharper financial downturn due to the credit crunch than other developed nations.

The currency touched an all-time low against the euro in December and a 24-year low against the dollar the following month.

However, later reports, including one from the OECD, have suggested that Britain is set to suffer less of an economic contraction in 2009 than the US, Germany and Japan.

Speaking to Reuters, currency strategist Lee Ferridge at State Street commented: ’The strong Rics survey overnight has boosted sterling.

’It is higher than it was 12 months ago and people are seeing tentative signs of green shoots in the UK housing markets.’ADNFCR-2318-ID-19124083-ADNFCR