UK economy resilient post-Brexit, CBI's distributive trades survey - latest addition to the conviction

Post-Brexit economic data resilient so far, and the Confederation of British Industry (CBI) quarterly Distributive Trades Survey is the latest addition to confirm that UK consumers are shrugging off Brexit fears and splurging this summer. CBI's quarterly Distributive Trades Survey released earlier on Thursday beat expectations for a further fall this month. UK retail sales volumes indeed grew in the year to August following last month's fall. 

Anna Leach, CBI head of economic analysis and surveys, said: "The summer weather has brought shoppers out onto the high street with retailers reporting that sales growth has risen, outdoing expectations, although firms do expect sales growth to ease next month."

Details of the report showed that volume of orders placed upon suppliers fell for a fifth consecutive month although retailers expect them to grow somewhat in the year to September. Growth in internet sales volumes picked up over the same period, outstripping expectations, with broadly similar growth expected next month. Investment intentions for the year ahead turned positive this quarter after remaining in the negative since 2013. Year-on-year employment was again flat in the year to August, although retailers expect a small cut in headcount in September. Retailers anticipate a further small improvement in their business situation. 

Today's survey follows strong official retail sales statistics out last week which showed despite the shock of the UK's vote to leave the EU, store sales climbed by 5.9 percent over the year. Markit survey showed that Household Finance Index for August reversed July's plunge and edged higher in June to 44.9, the highest reading in four months. Separate data released by the Office for National Statistics (ONS) showed the UK’s official jobless rate remained unchanged at eight-year lows of 4.9 percent in July, while the claimant count surprised markets on the downside. Inflation update which showed UK's consumer prices index (CPI) rose to a higher-than-expected 0.6 percent in July (consensus 0.5 percent). 

UK's hard data from the post-referendum period do not show any major impact from Brexit yet. That said, it’s probably too early to spot signs of Brexit damage. UK reports Q2 GDP data on Friday. According to a Societe Generale research report, UK Q2 GDP second estimate likely to confirm first estimate of 0.6 percent growth.

Cable largely range-bound, down 0.31 percent on the day, trading at 1.3185 at around 11:45 GMT. Fed Chair Janet Yellen's speech at the Jackson Hole Symposium on Friday will be a major trend determinant. EUR/GBP was 0.53 percent higher, trading at 0.8556.