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Warning: NatWest boss Paul Thwaite
The head of NatWest warned yesterday that business optimism has waned since the summer as businesses worry about the budget.
Paul Thwaite said uncertainty over Rachel Reeves’ plans, along with the US election and wider global tensions, were weighing on confidence.
The chief executive of the state-backed lender said the economy has performed better than expected since the beginning of the year. But there were signs of nervousness among businesses, as well as hesitancy in some consumer behavior, as households delay larger purchases.
The warning came as NatWest, which remains almost 16 per cent taxpayer-owned after its bailout during the financial crisis (although Labor has abandoned the Conservative government’s plans for a share retail sale), reported a third better than expected £1.7bn. profit of the quarter.
The shares rose to their highest level since 2011 in early trading before giving up most of the gains to close up 0.6 per cent, or 2.1 pence, at 363.9 pence. Thwaite said confidence between businesses and consumers had increased compared to last year. This was reflected in higher mortgage applications and demand for loans by companies.
However, “not all customers feel the same way,” Thwaite said, adding: “While discretionary debit card spending on smaller items like clothing has increased, we are seeing larger purchases delayed and consumers saving on a greater pace than before.” -pandemic.’
Businesses were feeling “largely positive” but this varied across different parts of the economy, Thwaite said.
“Some companies are waiting for greater clarity around things like the budget, interest rate decisions and the outcome of the US election,” he said. Thwaite did not want to leave room for 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 every nation, in every region of the UK.”
‘That’s obviously what the business community would like to see.
“The economy has performed better over the last ten or twelve months than many predicted.”
Markets cheered the results as NatWest halted a previous trend seen in which savers were withdrawing funds in search of higher interest products.
Customer deposits grew by £2.2bn in the third quarter to £427.4bn. Loans grew by £8.6 billion, the bank said.
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