Housing slump hits economic growth

A housebuilding slump hit growth in the second quarter of the year as the UK's economic slowdown gathered pace.

The economy expanded by just 0.2% between April and June - the slowest pace since the first three months of 2005, although in line with City forecasts.

But the impact of the credit crunch on a struggling housing market was underlined as construction output fell by 0.7% due to a "particularly large" fall in new housebuilding, according to the Office for National Statistics' (ONS) first estimates.

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