Dividends keep pace with inflation: boom in oil payments boosts UK stock market rewards for investors affected by cost of living crisis

Payments by British companies rose in the first quarter of the year, and shareholders are stuffing their pockets just as many Britons are pressed by the cost of living crisis.

Dividend payments rose just over 14 percent in the three months to the end of March to £ 12 billion, according to asset manager Janus Henderson.

Oil companies were the “main motivator” for growth in payments during this period, as they made rapid profits amid rising energy prices as a result of rising demand and supply disruptions caused by the end of the pandemic and the war in Ukraine.

Healthcare and telecommunications companies also helped raise numbers when AstraZeneca announced the first increase in its dividends in nearly a decade, and BT resumed its own payments after a two-year hiatus.

Rising payouts for City investors, especially for oil and gas companies, are likely to push for unexpected tax demands for UK corporations to contribute as household budgets shrink.

Russ Mold, director of investment at AJ Bell, said that while the economic rationale for the windfall tax was “unclear”, such a policy could look like a good policy because the united . ‘

“It would be a bigger surprise now if we didn’t see a tax on big oil than if we did,” Mold said, adding that the bosses of major energy companies “should really try to join sooner rather than avoid the problem.” ‘. ‘

Oil companies should meet with major utilities and agree on appropriate payment, ”he said.

“It would be a good policy and from the point of view of Big Oil also a good economy, because they are then responsible for the debate.”

About 81 percent of companies in Janus Henderson’s global dividend index increased payouts over that period, while another 13 percent kept their payouts at the same level.

However, Jane Shoemak, client portfolio manager at Janus Henderson, warned that the impact on dividends of the macroeconomic challenges facing businesses could hurt payouts in 2023.

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