Weak pound helps boost UK dividends to near-record high

DIVIDENDS from British companies surged by 39pc to £37bn in the second quarter of 2022, with a weak pound helping to add billions.

Underlying dividends, which exclude special one-off payments, grew by more than a quarter to £32bn, just shy of the all-time high of £32.4bn in the second quarter of 2019, according to the data firm Link.

The surge was partly because of the fall in the pound against the US dollar, Link said. Two fifths of British dividends were denominated in dollars, which boosted the total by £1.4bn.

The mining sector was another key driver, as the war in Ukraine sent commodity prices soaring. The industry accounted for almost a quarter of total dividends in the period at £8.7bn, rising by 37pc compared with last year.

Separate research from the Association of Investment Companies found a third of the highest yielding investment trusts were in London-backed British stocks. Eight were classed as “dividend heroes”, meaning they raised payouts for at least 20 years in a row.