Capital Economics: UK economy faces recession despite Q2 growth

Ruth Gregory, deputy chief economist at Capital Economics, warned that the UK has avoided a recession for the time being, but economic contraction may still occur in the future.

U.K. gross domestic product rose 0.2% in the second quarter, led by a 0.5% increase in exports in June, slightly above economists’ expectations.

But Gregory said June’s growth was driven by a relatively high number of working days, and with rate hikes yet to have most of the impact, a mild recession is still likely later in the year, starting with GDP in the current quarter. The descent begins.