A sale of shares in NatWest to the general public could be in jeopardy after the Prime Minister called a General Election on Wednesday night, analysts have warned.

Shares in NatWest were down on Thursday morning following reports that the timing of the election, set for July 4, could put the retail share offer on ice.

The Government is hoping to fully offload its ownership of the taxpayer-backed bank, which it bailed out during the 2008 financial crisis, by 2025 to 2026.

Chancellor Jeremy Hunt revealed plans to start selling its stake to ordinary investors as early as the summer.

It currently has a shareholding of about 27% in the bank and has recently accelerated the process of whittling down its stake.

But the plans could be impacted by a July election which is earlier than many in Westminster had expected, with a contest in October and November widely thought to have been more likely.

It kicks off a period of election campaigns and means Parliament will be dissolved ahead of voters going to the polls.

Analysts said this could prevent the Government from launching the highly-anticipated sale this summer, which was expected to offer NatWest’s shares at a discounted price.

Robert Sage and Stuart Duncan, analysts for investment bank Peel Hunt, said: “This share sale cannot take place before the General Election and the new government, which polls are currently suggesting is likely to be formed by the Labour Party, may or may not proceed with this initiative.”

Labour currently has a 20-point lead on the Conservatives in opinion polls.

Mr Sage and Mr Duncan added that if the share sale was cancelled, it could delay when the Government is able to fully offload its stake in the lender.

Gary Greenwood, an analyst for Shore Capital Markets, said: “In the seemingly unlikely event that the Conservative Party is re-elected, we would expect a rapid thaw and for such plans to be swiftly reintroduced.

“However, should the Labour Party come to power, as widely anticipated, then such plans are likely to be revisited and possibly amended.”

However, he said any government is ultimately likely to still want to reduce and ultimately exit its shareholding in NatWest.

NatWest’s chairman Rick Haythornthwaite said last month that returning the bank to private ownership would “bring an end to a sorry tale for the UK and for the bank”, referring to it being rescued by UK taxpayers about 15 years ago.

Shares in NatWest were down about 2% on Thursday morning.

NatWest declined to comment on the reports.