HSBC upgrades British economic growth forecast to 0.6 pct in Q2

LONDON, July 19 (Xinhua) -- British economy might grow at 0.6 percent in the second quarter of this year, 0.2 percentage points higher than its previous estimate in April, said HSBC on Friday in London.

The upward revision reflects two sets of factors, said HSBC in its UK Q2 2013 GDP Preview report.

First, survey data, particularly for the service sector, has been strong across the board recently and consumer confidence is about as high as it has been since the VAT (value added tax) rise took effect in January 2011.

Second, HSBC expects a return to growth in construction and a modest rise in extraction after big falls in 2012.

"While output indicators are improving, hard data on the expenditure side of the economy show that real-term household incomes continue to decline, which will limit their spending power," argued HSBC.

British GDP grew at 0.3 percent in the first quarter of 2013, and the first release of the second quarter GDP is on 25th July.