Economy sees lowest quarter-on-quarter growth for three years thanks to housebuilding woes
The crisis in the housebuilding sector has sunk the UK into the lowest rate of economic growth in three years.
A 0.7% fall in construction output driven by the dramatic slowdown in housebuilding meant that the UK economy as a whole grew by only 0.2% in the second quarter of this year. It grew 1.6% during the same quarter last year, and by 2.3% in the first quarter of 2008. The Office of National Statistics said that the crisis in the housebuilding sector, which has already seen thousands of workers lose their jobs, was partly to blame for the slump.
But it is not only construction that is suffering. The services sector, which accounts for 74% of GDP, rose only 2.1% on the same period a year ago, the lowest annual rise since 1992.
Economists warned that the rapid slowdown in economic growth points to the likelihood of a recession. A country does not technically enter a recession until it has experienced two consecutive quarters of negative growth. But one economist told the BBC that overall economic growth in the third quarter of the year “has ground to a complete halt”.