Key Takeaways
- NatWest (NWG) reported strong Q3 2025 earnings, significantly exceeding analyst expectations with a pretax operating profit of £2.18 billion and raising its full-year guidance for Return on Tangible Equity (ROTE) to above 18%.
- The UK retail sector demonstrated resilience in September 2025, with sales including auto fuel rising 0.5% month-on-month and 1.5% year-on-year, both surpassing analyst estimates.
- Excluding auto fuel, UK retail sales saw an even stronger 2.3% year-on-year increase, indicating robust consumer spending in other sectors, particularly computer and telecoms retail.
- Sweden's Producer Price Index (PPI) showed a notable shift in September, with the annual rate turning positive at 0.5% after a previous negative reading, while the monthly rate declined by 0.7%.
- Political uncertainty looms in the US as "cracks emerge" in Democratic unity regarding a potential government shutdown.
NatWest Group (NWG) delivered an impressive performance in the third quarter of 2025, with its pretax operating profit climbing to £2.18 billion, significantly surpassing the estimated £1.82 billion. The banking giant also reported robust non-interest income of £1.06 billion against an estimated £885.5 million and net interest income of £3.27 billion, slightly above the £3.2 billion forecast. Following these strong results, NatWest has upgraded its full-year guidance, now expecting a Return on Tangible Equity (ROTE) of above 18%, up from previous guidance of above 16.5% and analyst estimates of 17.2%. The bank also anticipates full-year income excluding notable items to be around £16.3 billion, an increase from its prior expectation of above £16.0 billion. This performance was attributed to growth across all customer businesses, including increased retail banking mortgage balances and commercial and institutional balances.
Meanwhile, the UK retail sector showed unexpected strength in September 2025, with sales volumes rising for the fourth consecutive month. Retail sales including auto fuel increased by 0.5% month-on-month, matching the previous month's rise and significantly outperforming the estimated 0.4% decline. On a year-on-year basis, sales were up 1.5%, well above the 0.4% estimate and the 0.7% growth seen in August.
When excluding auto fuel, the picture was even brighter, with month-on-month sales rising 0.6% (compared to a previous 0.8% and an estimated -0.6% decline). Year-on-year, retail sales excluding auto fuel surged by 2.3%, far exceeding the 0.6% estimate and the 1.2% growth in August. The Office for National Statistics (ONS) highlighted that computer and telecoms retail contributed positively to this growth. Stronger clothing and online demand, possibly boosted by warm weather in July and August, also supported this four-month run of growth, pushing overall volumes to their highest level since mid-2022.
In Sweden, the Producer Price Index (PPI) demonstrated a notable shift in September 2025. The annual PPI rate turned positive, rising 0.5% year-on-year, a significant rebound from the -0.7% decline recorded in August. This marks the first annual increase in producer prices since February, primarily driven by a strong rise in energy-related products. Conversely, the monthly PPI saw a decline of 0.7%, reversing the 0.5% increase from the previous month.
On the political front, concerns are mounting in the United States as "cracks emerge in Democrats' unity" regarding a potential government shutdown. This political uncertainty could have economic implications if a shutdown materializes, potentially impacting various federal operations and services.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.