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More than a decade after the financial crisis, the UK government is taking another step towards cutting its majority shareholding in NatWest.
The Treasury announced this morning it has instructed Morgan Stanley to sell NatWest shares on its behalf over a 12-month window, with sales starting on 12 August 2021 at the earliest and running for up to a year.
The sale is capped at 15% of the traded volume of NatWest shares, and the Treasury insists they will only be sold at a price that represents “value for money for taxpayers”.
The government says this trading plan shows “continued progress” towards the government’s plan to return its shareholding to private ownership, adding:
Shares will only be sold at a price that represents value for money for taxpayers.
There is cap on the total number of shares that could be sold of 15% of the total number of NatWest Group shares being traded in the market over the 12 month duration of the plan.
The government still owns around 54.7% of NatWest after bailing out the lender almost 13 years ago, which was then called Royal Bank of Scotland, in the crisis of 2008 as it battled to prevent the collapse of the banking system.
So this sale could finally take the taxpayer’s stake below 50% –having hit 84% back in 2009.
In May, the government sold around £1.1bn of NatWest shares, so this is another move towards lowering the taxpayer’s stake in the bank.
However, recouping the cost of the bailout remains unlikely. The UK paid an average of 502p per share when it rescued RBS. NatWest shares closed at around 200p last night. But they have been rallying recently, doubling since the market crash of spring 2020 when they slumped to 90p.
The sale will free up some cash as the government faces a tricky autumn spending review, with demands to spend more to fix a £10bn black hole in health, education and transport.
Also coming up today
UK retailers are warning of the risk of food shortages as the UK’s “pingdemic” puts a growing strain on supply chains.
The number of workers, including food processing staff and lorry drivers, getting pinged by the NHS Covid app continues to rise, creating increased pressure to keep shelves stocked – and calls to include supermarket staff, lorry drivers and other frontline workers on a list of those exempted from self-isolation rules.
This morning, the boss of supermarket chain Iceland told Good Morning Britain this morning that the situation is getting worse.
Richard Walker warned:
Issues around supply chain have been building for quite some time. We have a structural issue with HGV drivers for a variety of different reasons. The pingdemic has made it even worse. The double pronged problem is that our store workers are now getting pinged as well.
We have over 1,000 who have been pinged and are having to self isolate at home. The result of these two issues combined means that we are starting to see some availability issues and it is increasingly very challenging to keep our shops open, to keep lorries travelling to our shops, to keep food on our shelves and to keep staff in our shops to serve the customers.
Walker is calling on the government to adjust the app or self-isolation rules urgently, ahead of planned changes on 16 August.
Our main Covid-19 liveblog has full details:
The European Central Bank is meeting to set monetary policy across the eurozone, for the first time since it adopted its new strategy of targeting inflation of 2% and to allow temporary inflation overshoots when interest rates are at record lows.
Investors are keen to hear how this will change its ‘forward guidance’ on interest rates and its stimulus programmes, and to hear its view of the economic recovery in Europe.
We also get the latest US unemployment data, and a healthcheck on UK factories.
- 7.45am BST: French business confidence survey for July
- 9.30am BST: BoE Broadbent Speech
- 11am BST: CBI industrial trends survey
- 12.45pm BST: European central bank decision on interest rates
- 1.30pm BST: ECB press conference
- 1.30pm BST: US weekly jobless claims