UK firms focus on debt repayment not dividends

High levels of consumer, corporate and government debt will put a cap on equity market growth, accor...

High levels of consumer, corporate and government debt will put a cap on equity market growth, according to New Star bond manager Theo Zemek. To alleviate pressure from creditors, companies are having to start paying back debt rather than growing dividends, which she says is positive for her as a bond investor as it means the creditworthiness of organisations is beginning to improve. She believes the financial markets are heading into a fairly benign environment, with low growth, low inflation, and a period of personal and corporate belt tightening to be expected. "This is bad for the g...