2011: the year of dividend growth

ON UK GROWTH

Threadneedle's Richard Colwell says on why he thinks UK companies will start increasing dividend payouts this year.

2011 looks like being the year in which dividend growth returns to the UK market after the cuts of the recession and the balance sheet repair that typified the early stages of the recovery. We are also seeing investors becoming increasingly disenchanted with alternative sources of income. Even if interest rates increase this year (and we are not convinced they will), real returns from cash will remain negative. Meanwhile, corporate bonds – the early beneficiaries of the recovery in risk appetite – are on shaky ground, with meagre spreads providing little insulation from an overpriced ...