NatWest Share Price Forecast After the Strong UK Inflation Data

    NatWest Share Price Forecast After the Strong UK Inflation Data
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    NatWest’s share price jumped on Wednesday following strong UK inflation data. The stock increased by over 1.35%, making it one of the top performers in the FTSE 100, alongside companies like Imperial Brands, Lloyds Bank, and Kingfisher. Currently, it’s trading at 210p, slightly above this month’s low of 205p.

    NatWest, along with other UK banks, saw gains after the release of robust inflation figures. The data revealed that the UK’s inflation rate rose to 3.2% in August, largely driven by strong growth in the restaurant sector, which benefited from price reductions during the “Eat Out to Help Out” initiative. This inflation rate is slightly below the Bank of England’s forecast of around 4%.

    These inflation figures followed the release of positive employment data, showing a decline in the UK’s unemployment rate and the addition of thousands of new jobs.

    As a result, analysts now anticipate that the Bank of England could be the first major central bank to raise interest rates in 2022. An analyst from KPMG noted that “Higher inflation will inevitably raise questions for the Bank of England on the timing of tightening monetary policy and interest rate hikes to contain inflationary risks further down the line.”

    Higher interest rates or a more hawkish monetary policy are generally positive for NatWest’s share price due to the bank’s large lending business, which could benefit from wider profit margins.

    The daily chart indicates that NatWest’s share price has been on a strong upward trend this year, making it one of the top performers in the FTSE 100. It has also outpaced other major UK banks like Lloyds, Barclays, and Standard Chartered.

    The stock remains slightly above the ascending red trendline and is hovering near the 25-day and 50-day moving averages. However, the shares seem to be forming a head and shoulders pattern.

    While the bullish trend may persist, there is a possibility of a significant pullback. If that occurs, the next key support level to watch would be around 200p, which aligns with the ascending trendline and is also a significant psychological level.