The U.K. is avoiding a recession for now but a contraction may lie ahead, Ruth Gregory, deputy chief economist at Capital Economics, writes in a note. The country’s gross domestic product rose 0.2% in the second quarter, including a 0.5% exit rate in June, slightly ahead of the stagnation expected by economists for the period. But a relatively high number of working days boosted June’s growth, and with interest-rate increases yet to take most of their toll, the U.K. is still probably heading for a mild recession later this year, starting with declining GDP in the current quarter, Gregory writes.

…