BREXIT WATCH-Latest developments in aftermath of Brexit vote

08/18/2016 6:03

* Graphic on Brexit impact http://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 program is designed to stimulate the Brexit-hit economy, not just to build inflation,so in the long run there may be dichotomy. REGULAR ITEMS: - Global Markets - Currency reports - Brexit Factbox: (Editing by Kevin Liffey)

08/18/2016 6:03