Barclays Plc raised its forecast for UK gross domestic product (GDP), believing the economy is emerging from its worst recession in a generation and will resume growth in the second half of the year.

Britain’s economy will contract -0.2% in the second quarter from the first three months of the year and stagnate in the third quarter, according to Simon Hayes, Barclays Capital’s chief UK economist. His previous forecast was for the economy to contract -1.1% this quarter and a further -0.1% in the next period.

Hayes said that the economy will grow +0.4 percent in the fourth quarter and keep expanding through 2010. He forecasts a contraction of -3.5% this year, compared with a previous prediction of -4.2%. He raised his estimate on expansion next year to +1.1% from +0.9%.