Murray's Luke urges caution on dividends

UK dividend growth will disappoint in 2012, undershooting forecasts, investment trust manager Charles Luke has warned.

Luke, in charge of the £460m Murray Income trust, said current expectations of a double-digit rise in payouts are over-optimistic given the headwinds facing companies. “The austerity measures could have a bigger impact in 2012 as they become more embedded in the economy,” said Luke. “As such, we believe dividend growth will be 9% this year, undershooting forecasts.” A number of peers - including Newton’s Tineke Frikkee - have also sounded a note of caution on market forecasts, urging investors not to get carried away with their expectations. Luke’s warning follows Capita Registrars...