UK avoids recession in boost for Truss

Britain is not yet in recession, revised data showed yesterday in a boost for under-fire Prime Minister Liz Truss, but its economy may still face a downturn on soaring interest rates.

Gross domestic product expanded 0.2 percent in the second quarter, said the Office for National Statistics in an upgrade from its previous estimate of a 0.1-percent contraction.

Even if the economy has shrunk in the current third quarter that ended yesterday, as the Bank of England forecasts, it would mean the UK had avoided two successive quarters of contraction -- the technical definition of a recession.

The turnaround follows a rough week for new PM Truss as the country's borrowing costs soared and the pound hit a record dollar-low after her government announced a controversial budget plan on September 23 that included a cap on soaring energy bills.

Truss and Finance Minister Kwasi Kwarteng met yesterday with Britain's fiscal watchdog to discuss the economic and fiscal outlook in the wake of last week's announcement of also debt-fuelled tax cuts.

"We will deliver the first iteration of that forecast" next week, the Office for Budget Responsibility said in a statement after the meeting.