NatWest has warned of a potential £140 million financial impact from the ongoing conflict in the Middle East, as it grapples with a slowdown in UK economic growth and rising inflation. The bank's current forecast for UK gross domestic product (GDP) growth is only 0.4% for this year, significantly lower than the 0.8% predicted by the International Monetary Fund. Despite these challenges, NatWest reported a 12% year-on-year increase in operating profits, totaling £2 billion in the first quarter, surpassing analyst expectations of £1.9 billion. The bank also anticipates inflation to rise to 3.5% and predicts a rise in unemployment to 5.5%. While house prices are expected to increase by 0.7% this year, NatWest forecasts a contraction of 1.8% in 2024 and a further decline in 2028. The Bank of England has maintained its base interest rate at 3.75%, with expectations of future increases due to the inflationary pressures stemming from the Middle East conflict.