NatWest boss: Budget fears have hit confidence
Warning: NatWest boss Paul Thwaite
NatWest’s boss warned yesterday that business optimism has waned since the summer as companies worry about the budget.
Paul Thwaite said uncertainty over Rachel Reeves’ plans, along with the US election and wider global tensions, weighed on sentiment.
The state-backed lender’s CEO said the economy has performed better than expected since the start of the year. But there were signs of unrest among businesses and hesitation in some consumer behavior as households postponed larger purchases.
The warning came as NatWest, which remains almost 16 per cent taxpayer-owned after its bailout during the financial crisis – although the Tory government’s plans for a retail share sale have been abandoned by Labor – earned a better-than-expected third of £ 1.7 billion reported. quarterly profit.
Shares rose to their highest level since 2011 in early trading before giving up most of their gains to close down 0.6 percent (or 2.1p) at 363.9p. Thwaite said confidence among businesses and consumers is up compared to last year. This was reflected in higher mortgage applications and demand for loans from companies.
However, “not all customers feel the same,” Thwaite said, adding: “While discretionary spending on debit cards for smaller items such as clothing has increased, we are seeing larger purchases being postponed, with consumers saving at a higher rate than before . -pandemic.’
Businesses were feeling “largely positive,” but this varied in different parts of the economy, Thwaite said.
“Some companies are waiting for more clarity on issues such as the budget, interest rate decisions and the outcome of the US elections,” he said. Thwaite refused to get drawn into speculation about what Reeves might announce next week.
But he added: ‘What I would like to see is a Budget that supports unlocking growth and investment in all countries and regions of Britain.
‘That is of course what the business community would like to see.
“The economy has performed better over the past 10 to 12 months than many had predicted.”
Markets welcomed the results as NatWest bucked a previous trend of savers withdrawing money in search of higher interest products.
Customer deposits rose by £2.2 billion to £427.4 billion in the third quarter. Loans grew by £8.6 billion, the bank said.
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