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July retail data are expected this week, but are unlikely to shed light on a post-Brexit future.Jason Alden/Bloomberg

When Britain voted to leave the European Union in June, many experts predicted the economy would take a beating. But so far, the picture has been mixed, leaving many wondering if "project fear" was overblown.

By some indicators, the economy is performing just fine. Unemployment fell to an 11-year low of 4.9 per cent for the three months ended May 31 and 176,000 jobs were created. The stock market has recovered its post-referendum losses, house prices have continued rising, consumer spending remains decent and the economy grew faster in the second quarter than in the first. There are even hints of a rebound in the commercial property market and among property funds that suspended trading last month because of soaring redemption demands.

"There is further evidence that calm and order are being restored to Britain's commercial property market," said Martin Gilbert, chief executive of Aberdeen Asset Management, which temporarily suspended redemptions on its British property fund in July.

Aberdeen has just lowered its redemption fee from 7 per cent to 5 per cent because of improved market conditions.

To be sure, there are plenty of worrying indicators. This month, the Bank of England dramatically slashed its economic growth forecast for 2017, going from 2.3 per cent to 0.8 per cent. Data from the National Institute of Economic and Social Research showed the economy contracted by 0.2 per cent in July. Construction activity has dropped and a key measure of business activity, the purchasing managers' index, fell to a seven-year low in July. The pound, too, has fallen 13 per cent since the referendum, but that has been a boost to exporters and the country's tourism industry.

This week, the country will get a few more data points for July: inflation, retail sales and employment. None are expected to offer much more clarity on where the economy is headed.

Economists expect inflation to remain at 0.5 per cent year over year in July and the unemployment rate to stay close to 5 per cent, although jobless claims are forecast to have increased. Retail sales are expected to be up slightly.

Paul Johnson, director of the Institute for Fiscal Studies, says it's too early to properly gauge the impact of Brexit.

"You are not going to be able to tell anything very quickly," he said.

But he pointed to the Bank of England cutting its growth forecast as a sign of what may be coming.

"Of course that's still just a forecast but that's the forecast on which policy is going to be made and it's entirely in line with pretty much where all the other forecasters are," he said.

The biggest impact on the economy going forward will come from whatever agreement Britain negotiates with the EU. British Prime Minister Theresa May has said "Brexit means Brexit," but she has yet to spell out exactly what kind of future relationship Britain the country will have with the EU.

The country could negotiate some kind of membership arrangement with the single market similar to Norway. But that would mean agreeing to the free movement of people and making contributions to EU budgets without any say over how the money is spent, something Brexit backers oppose. It would also mean Britain's financial sector would have to abide by EU regulations without having any input into their development or implementation.

Britain could go for a Canada-EU type of trade agreement, but that won't have nearly the same access as membership and it could hamper the financial-services sector that enjoys so called "passport privileges" within the EU.

A report by the IFS found that maintaining membership in the single market would be worth 4 per cent of GDP. "Both theory and the available modelling suggest [single market] membership would be likely to mean stronger British economic performance than a [free-trade agreement] with the EU," the report said.

"Really all of the evidence is that it's being in the single [market] which is economically really valuable and that is possible, it seems, outside of the EU in terms of what Norway and one or two other countries do," Mr. Johnson said. "Whether that is going to be politically acceptable is obviously a big question."