LONDON (AP) — British housing and retail sales plunged and inflation skyrocketed in September as the financial crisis worsened, three new reports said yesterday. But as the stock market rose on the back of an enormous government bank bailout plan, experts were hopeful that the picture will improve soon.

Real estate agents sold an average of just 11.5 properties during the three months through September — or under one property a week each, according to the Royal Institution of Chartered Surveyors' survey. That is 52 percent lower than a year earlier, and the lowest level the group has ever recorded since beginning the survey in 1978.

But a spokesman for the surveyors, Jeremy Leaf, said that house sales could soon improve.

On Monday, the British government invested £37 billion ($63 billion) to buy equity stakes in three of the country's largest banks on the condition that the institutions would increase mortgage lending.

The deal, said Leaf, "raises the possibility that the lack of mortgage finance that has so damaged the housing market might be eased."

In addition, the Bank of England cut its interest rate by half a percent last week — to 4.5 percent — in a move that promises to stimulate the housing market by bringing down the cost of some mortgages.

Like housing, retail sales also fell in September — dropping 1.5 percent compared to a year earlier, according to the British Retail Consortium's sales monitor, published yesterday.

But the authors of the report were optimistic that the market was evolving to maintain profitability — and keep consumers happy — in the tightening economic environment.

"Impulse buying is disappearing as people consider purchases carefully and actively seek out promotions," said Stephen Robertson, director general of the British Retail Consortium. "If you're after a bargain it's great news as shops have responded with some of the most dramatic discounts and offers in recent times."

Meanwhile, economists were confident that inflation peaked in September — at a 16-year high of 5.2 percent — and will drop down to the government target level of 2 percent by the end of next year.

Yesterday, Britain's Office for National Statistics said the biggest upward pressure on prices came from utilities, with average gas and electricity bills jumping as providers passed on rising costs.

With oil prices now down well below $100 a barrel from a high of around $140 a barrel, economists expect that inflation will return to the government's target by the end of 2009.

"With the economic downturn gathering pace and commodity prices in decline, the probability that inflation will undershoot the two percent target in the second half 2009 is rising," said Richard Snook, senior economist at the London-based Center for Economics and Business Research.

The FTSE 100 index of leading British stocks gained 5 percent yesterday to 4,466.