Housing Market Issues Threaten U.K. Economy

London–U.K. housing market fears caused the pound to decline against the euro after a two-day rise and raised new concerns about the overall economy, Bloomberg reported Wednesday.A private report released Wednesday that said U.K. economic growth had fallen to a three-year low in the quarter to May only increased speculation that the U.K. economy was weakening because of sinking home values.The pound’s strength against the dollar did not change drastically.Merrill Lynch & Co.–who said declining home prices could cause land value losses–downgraded homebuilders including Galliford Try Plc and Barratt Developments Plc.”The overall trend is for a further deterioration in the U.K economic outlook with the housing market continuing to weaken,” Ian Stannard, a London-based senior currency strategist at France’s largest bank, BNP Paribas SA, told Bloomberg. “That’s going to have a negative impact on the consumer.”