July 19, 2016 / 10:50 AM / 3 years ago

BREXIT WATCH-Latest developments in aftermath of Brexit vote

* Graphic on Brexit impact reut.rs/2aqnwkw

    By Jeremy Gaunt
    LONDON, Aug 18 (Reuters) - Britain's June 23 referendum
decision to leave the European Union has had far-reaching
consequences for the world's economy, businesses, investors and
politics. Following are the main developments:
    
    AUGUST 18
    It is becoming clear that the worst-case predictions of
"Project Fear" - the Remain campaign's failed pitch that the sky
would fall in after a vote to leave the EU - are not immediately
coming to pass.
    Retail sales volumes rose 1.4 percent in July compared with
June (nor has there been much impact on jobs). 
    As with all data, however, it depends on how you read it.
July sales were boosted by warm weather driving up clothes sales
and the pound's plunge tempting overseas buyers to splash out on
luxury items.
    It can also be argued that the 52 percent of the population
who voted for Brexit are presumably not depressed by the result.
    Surveys of economic sentiment remain gloomy, which is one
reason why the Bank of England has been so ferocious in seeking
to combat Brexit fallout.
    It will take a long time for the real impact to be seen. 


    IMPORTANT DATES AHEAD:
    - Sept. 15: Bank of England rate meeting 
    - Sept. 16: Informal EU summit in Bratislava
    - Sept. 24: Britain's Labour Party chooses its leader
    - Sept. 25-28: Labour Party conference
    - October TBA: Italian constitutional reform referendum
    - Oct. 2: Re-run of Austrian presidential election
    - Oct. 2-5: British Conservative Party conference
    - Oct. 13-15: Scottish National Party conference
    - Oct. 20-21: Formal EU summit in Brussels
    
    PREVIOUS
    AUGUST 16
    Britain could get a "special status" with the European Union
but it should hurry up and start talks.
    So says Michael Roth, Germany's Europe minister, in a chat
with Reuters in Berlin. He offers no details on what that status
would be, but says it will probably bear "limited comparison" to
that of countries that have never been EU members.
    Having offered this carrot - which should be welcome in
London - Roth said Germany wanted Britain to file Article 50,
triggering exit negotations, so that it can get out within two
years and before the next European Parliament elections.
    He also held firm on the sanctity of the free movement of
people - seen by Brexiteers as unfettered immigration.
    
    
    Germans, meanwhile, appear to have got over some of their
Brexit angst - but not all. The latest ZEW economic sentiment
indicator - for August - rose to 0.5 points from minus 6.8
points in July.
    July marked a huge plunge, however, from 19.2 in June. And
economists had been expecting 1.8 this month. So they are still
angsty.
        
    The impact of the steep fall in the pound after the Brexit
vote shows up in British inflation data. Consumer price rises
were up 0.6 percent in July from a year earlier, their biggest
rise since the end of 2014.
    Factory gate prices rose at their fastest pace in over two
years - albeit not much. They were up 0.3 percent in July,
compared with the same month last year, stronger than a median
forecast in a Reuters poll.
    But the retail price index rose 1.9 percent - above the
highest projection in Reuters polls.
    Such rises may not overly bother the Bank of England
immediately because they are low. Indeed, the bank wants more
inflation. But its money-printing programme is designed to
stimulate the Brexit-hit economy, not just to build inflation,so
in the long run there may be dichotomy.

    
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 (Editing by Kevin Liffey)
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