The NatWest share price is hovering near its highest level since January 2020 as demand for the stock rises. The NWG share price is trading at 227p, which is a few points below the YTD high of 230p. It has also become the best performing bank stock in London.
UK economy and NatWest
NatWest is a leading UK bank that owns several brands. It owns brands like NatWest, Royal Bank of Scotland, Ulster Bank, Coutts, Adam & Company, Child & Co, Drummonds, Lombard, Isle of Man Bank, and Free Markets.
The company is mostly a national bank without any major operations outside the country. The company makes money by offering services like retail and commercial banking. It also offers private banking and NatWest Markets business. Therefore, NatWest does well when the UK economy does well. It also does well when interest rates are high.
And, with the UK currently facing significant inflation pressures, there is a likelihood that the Bank of England (BOE) will start tightening sooner than expected. If this happens, it could benefit NatWest. Still, the biggest challenge is that the country faces stagflation fears. This is where inflation rises while the economic growth stagnates. The BOE could face challenges to hike rates during a stagflation period.
NatWest share price forecast
The daily chart shows that the NWG share price has been in a major bullish trend. We also see that the stock has formed an ascending channel that is shown in green. It is also slightly above the 25-day and 50-day moving averages. It is also above the Ichimoku cloud.
Therefore, at this stage, the stock will likely keep rising as bulls target the next key resistance at 250p. This view will be invalidated if the price crashes below the support at 200p. Such a drop will mean that there are still more sellers left in the market.
