Miton's Moore: Currency boon is possibly papering over some cracks for UK income stocks

Likely to last until June

The sharp fall in sterling since the Brexit referendum has been good news for income investors. The latest Capita UK Dividend Monitor reports that dividend growth for 2016 is coming in at 6.6%.

This is much higher than feared at the start of the year, but has mostly been powered by sterling's weakness.  The UK market has many heavyweight stocks that declare their dividends in US dollars and as these get translated back at more favourable rates, this is good news for sterling investors.  For example, the 90 cents interim dividend declared by AstraZeneca last August was worth 19% more in sterling than the identical 90 cents the company declared the year before.  Even companies that declare dividends in sterling, but have large operations overseas, are feeling the benefit. G...