UK retail sales post an impressive 1.5 pct jump in July, ease fears of a Brexit-induced recession

Data released earlier on Thursday by the Office for National Statistics showed that UK’s July retail sales posted a monthly rise of 1.4 percent beating consensus expectations of a 0.2 percent increase. The yearly figure saw a rise of 5.9 percent. Data showed that sales increased at all categories of stores it monitors, with sales at department stores and clothing outlets leading the gains.

"Better weather this year could be a major factor with sales of clothing and footwear doing particularly well," said Joe Grice, chief economic adviser at the ONS.

Today's data adds to evidence suggesting the British households largely shrugged off the surprise referendum result. A survey by financial data firm Markit showed on Wednesday that British households have recovered from a loss of confidence about their finances. UK claimant count unexpectedly fell by a seasonally adjusted 8,600 in July and UK's consumer prices index (CPI) rose to a higher-than-expected 0.6 percent in July (consensus 0.5 percent).

The first set of UK's hard data from the post-referendum period do not show any major impact from Brexit yet and hence is likely to keep the Bank of England (BoE) on hold at its September 15 meeting. 

The BOE nevertheless believes the U.K. economy is poised to slow in the second half of 2016 and next year. Official estimates for growth in the overall economy in the third quarter will be published in October.