NatWest faces £140m hit from Iran war as UK growth slows and inflation rises
Summary
NatWest expects to lose £140 million due to the war in the Middle East, as the UK economy grows more slowly and inflation rises. Despite this, the bank reported higher profits than expected for the first quarter of the year.Key Facts
- NatWest took a £283 million charge, with nearly half due to increased geopolitical risks and weaker stock markets.
- The bank now expects the UK economy to grow by only 0.4% this year, down from earlier forecasts.
- Unemployment in the UK is forecasted to rise to 5.5% this year.
- Inflation could reach 3.5% because of the impact of the Iran war.
- NatWest predicts the Bank of England will keep interest rates at 3.75% through at least 2030.
- The bank expects house prices to grow slightly this year, then fall in 2025 and 2028.
- Other banks like Lloyds also reported charges related to the worsening economic outlook.
- NatWest expects its total income for the year to be near the high end of previous estimates (£17.2bn to £17.6bn).
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