Euro crisis likely to hit dividend outlook of UK companies

ON UK INCOME

The problems with the European debt market are a cause for concern for UK income funds that still have exposure to the banking sector.

The banks’ ability to resume dividend payments is partially dependent on their own debt repayment or extension schedules. A further write-off of debt would continue to lengthen the timescale before dividend payments could resume. Continuation of the European debt crisis is also likely to impact the outlook for dividends in the boardrooms of many British companies, who may tread cautiously in the face of uncertainty and likely short term demand fluctuations. The UK government started to address our budget deficit much earlier than several European countries. Countries such as Greece have ...