UPDATE 3-BT raises full-year outlook as cost cuts help

* Q2 revenues down 3 pct, in line with forecasts

* EBITDA beats forecasts with 2 pct growth

* Increases cost cutting target, revenue outlook

* Expects dividend up around 5 pct

* Shares up 3.9 pct

(Adds reaction, further details)

By Kate Holton

LONDON, Nov 12 (Reuters) - Britain's BT Group (BT.L) increased its outlook for the full year after stringent cost cuts helped the former telecoms monopoly deliver strong core earnings as it recovers from a debacle at its key division.