THE economy of every region of the UK will expand this year, said a

report published yesterday.

Regional forecasts prepared by Business Strategies Ltd showed that

Wales was growing faster than anywhere else while the North of England

and Greater London lagged behind.

The report said: ''There is now firm evidence that economic recovery

is under way in the UK.''

But it added: ''Despite low interest rates, consumers remain cautious

and growth in most service industries is still hesitant.

''Signs of recovery in the housing market remain patchy and negative

equity (people with homes worth less than their mortgage) is still a

problem in some areas.''

BSL, a leading economics and forecasting firm, said the manufacturing

sector was leading the recovery as a result of last year's devaluation

of sterling and major new inward investments, such as Japanese car

plants.

This had helped regions such as Wales, East Anglia, the West Midlands

and East Midlands.

A rundown of North Sea oil and gas investment has hit Scotland.

BSL predicted economic growth throughout the UK of 1.7% this year,

rising to 2.8% in 1994 and 1995.

The regional growth forecasts are: North -- 1993 0.4%, 1994 2.8%, 1995

3.3%; Yorkshire and Humberside -- 1.6%, 3.3%, 3.3%; East Midlands --

2.5%, 3.4%, 3.3%; East Anglia -- 2.6%, 3.4%, 3.4%; South East -- 1.0%,

3.0%, 2.9%; Greater London -- 0.5%, 3.0%, 2.4%; South West -- 2.5%,

2.8%, 2.4%; West Midlands -- 2.7%, 3.1%, 2.5%; North West -- 2.5%, 2.2%,

2.5%; Wales -- 2.9%, 3.3%, 2.7%; Scotland -- 1.2%, 1.7%, 2.2%; Northern

Ireland -- 2.7%, 1.6%, 1.9%.