Capita predicts 'year of no dividend growth' as payouts stall

Dividends paid out by UK companies this year are expected to undershoot previous estimates as the impact of the strong pound hammers payouts, Capita's latest Dividend Monitor has warned.

Despite a recent decline in the value of sterling, a strong pound has nonetheless hurt companies reliant on dollar-denominated income for most of the year, impacting previous forecasts which predicted dividends would top £100bn. In its latest report, Capita has cut its forecast for 2014 from £101.8bn to a headline figure (which includes special dividends) of £97.1bn. While 2014's figure is still sharply higher than the previous year, when total dividends came in at £80.3bn, almost a fifth of this year's payout comes from one-off special dividends. Underlying dividend growth has eff...