Financial professionals in the city are anxious over trade turbulence
A Warning from NatWest: Global Economic Uncertainty and Dipped Confidence
Paul Thwaite, NatWest's boss, announced a potential pause in activity among some of Britain's biggest firms due to the ongoing trade war, which is causing a stir in confidence. This statement comes after the bank reported a 36% surge in profit to £1.8 billion for the first quarter.
Thwaite acknowledged the economic uncertainty has increased and confidence across both businesses and households has taken a hit. This isn't the first warning from bank bosses this week. The chairman of HSBC and Standard Chartered have also raised concerns, expressing serious potential risks to global growth and a more fragmented global outlook, respectively.
Despite the challenges, Thwaite noted that the impact on customers varies based on circumstances, with arrears remaining low and corporate and household borrowers demonstrating resilience. However, large corporations exposed to global trade are experiencing a "pause in activity", with many adopting a "wait and see" approach. Smaller businesses and consumers are focusing more on the domestic agenda and haven't yet shown significant changes in behavior in response to recent volatility.
The unpredictability primarily affects those exporting or heavily dependent on international trade, as they're taking stock and waiting to see how events unfold. This primarily manifests in investment decisions and corporate finance activity.
NatWest experienced a boost in the first quarter due to a surge in mortgage lending, driven by borrowers rushing to complete house purchases before the stamp duty increase in April. As a result, the bank expects to deliver income and returns for the year at the upper end of its guidance, resulting in a 1.3% rise in its shares.
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NatWest is preparing to return to full private ownership for the first time since it was bailed out by taxpayers in 2008. The Government's stake in the lender has now fallen below 2%. HSBC chairman, Sir Mark Tucker, and Standard Chartered's Bill Winters have also expressed their concerns over the trade war during their respective annual general meetings.
- With increased economic uncertainty and a dip in confidence, NatWest's boss, Paul Thwaite, has warned of a potential pause in activity among some large firms, primarily those that are heavily dependent on global trade or investing.
- Thwaite noted that the impact on customers can vary, but large corporations engaged in international trade are experiencing a pause, adopting a cautious "wait and see" approach, while smaller businesses and consumers are focusing more on the domestic agenda.
- Amid this global economic uncertainty, HSBC's chairman, Sir Mark Tucker, and Standard Chartered's Bill Winters have also expressed concerns, warning of potential risks to global growth and a more fragmented global outlook.
- In the meantime, personal finance and investing, both business and individual, could be impacted by these warnings, as investment decisions and corporate finance activity may be affected by the unpredictability.
- NatWest, however, experienced a boost in the first quarter due to a surge in mortgage lending, suggesting that investing in personal-finance, such as property, might still be a viable option for some.
- With the government's stake in NatWest now below 2%, the bank is preparing to return to full private ownership for the first time since its bailout in 2008, signifying growth and potential for reaping returns in the future.
