Britain faces an imminent recession, leading economists have warned. Spurred downwards by years of overspending on aid to foreign nations who hate Britain, aid to asylum-seekers, aid to immigrants and billions spent on the Iraq war, the latest official figures show that growth fell to just 0.2% between April and June.

The utter mismanagement of the British economy has been excoriated by the credit crunch and the bankrupting of America by the Bush administration in the pursuit of its war in Iraq.

Figures show a house building slump as the economy grew at its slowest pace since the beginning of 2005, according to Office for National Statistics estimates. The figures have fuelled expectations that the UK faces a period of recession – defined by two consecutive quarters of negative growth.

Business leaders at the British Chambers of Commerce have warned of a “dramatic worsening in economic prospects. The position is likely to deteriorate in the second half of the year. We now expect zero or negative growth in the next two or three quarters,” economic adviser David Kern said.

But the Bank of England is unlikely to come to the rescue with rate cuts in the near future, because surging fuel and food costs have pushed inflation to almost double its 2% target. (In reality, everyone knows that real inflation is way above this alleged 4% figure – ask any person buying groceries on a weekly basis. Petrol alone has risen more than 20%!).

House construction output fell by 0.7% due to a “particularly large” fall in new house building during the second quarter, the ONS said. Hundreds of new projects have been shelved since March, as would-be buyers struggle to get mortgages because lenders hit by the credit squeeze have hiked borrowing costs. Builders have axed around 5,000 jobs as the housing market heads downwards.

ING Bank economist James Knightley said recession “seemed probable”.  He added: “The credit crunch coupled with falling house prices and rising food and energy costs are continuing to constrain activity, yet fiscal and monetary policy can do nothing to ease the pain.”

The pace of growth was last lower – at 0.1% – seven years ago. The current economic woes threaten a record of 64 consecutive quarters of growth since the UK’s gross domestic product last shrank, between April and June 1992.

The figures come amid predictions of UK growth slowing to its weakest levels since the early 1990s between 2008 and 2010, according to the National Institute of Economic and Social Research.

The annual rate of growth in gross domestic product has also slowed to 1.6% – again the lowest for three years, according to the ONS estimates.

The squeeze on hard- pressed consumers was highlighted by weaker growth in retail output, which slowed to 0.2% during the second quarter of the year.