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BOB MOON: There's an unsettling report being carried this morning by London's Daily Telegraph warning that the global economy could yet take a big hit from the slump in the housing market. A major investment bank says it's a lot more serious than widely believed because falling prices could hurt the old reliable American consumer who's been providing the fuel for the world's economic engine. Ironically, on the other side of the pond in Britain, shares in home building companies are soaring. Marketplace's Stephen Beard has more from London.

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STEPHEN BEARD: What a difference between the British and American housing markets!

The boom has lasted a decade here and house prices are still surging. So are the profits of the house building companies.

And so is the urge to merge. Two leading firms have just announced a deal to create Britain's biggest house builder.

Oddly enough, this merger has been partly fuelled by problems in the U.S., says analyst Liz Wynn Roberts.

LIZ WYNN ROBERTS: They both have exposure to the U.S. housing market which, as we know, is in decline. And this would be very good for cost savings over there and of course over here.

Between them two companies build around 9,000 houses a year in the U.S. Fortunately for their shareholders, they build more than 20,000 in the U.K.

In London, this is Stephen Beard for Marketplace.