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U.K. Dividend Champions List: 2023 Rankings by Yield

Ramish Cheema
9 min read

In this piece, we will take a look at U.K. dividend champions ranked by dividend yield. For more stocks, head on over to Top 5 U.K. Dividend Champions Ranked by Yield.

The world economy is still recovering from two massive shocks in just five years. According to estimates from the United Nations, between mid 2020 and mid 2022, the global economy was expected to lose an eye popping $8.5 trillion due to the direct impact of the coronavirus pandemic, with 34 million people pushed into poverty in 2020 alone. Adding to this, before the Russian invasion of Ukraine, the World Bank had estimated that global GDP growth would slow down to 4.1% in 2022 after it grew by 5.5% in 2021.

Then, sentiment further soured as the Russian invasion started. Estimates by the World Bank released in October - when the invasion-fueled inflation was at a record high in Europe - showed that economic activity would have a "minimal growth" of 0.3% in 2023 for economies in Europe and Central Asia. At the same time, economic output was expected to slow down by 0.2% in 2022. These changes are due to the high energy prices which create inflationary pressures. These end up depressing the consumer's purchasing power and lead to lower purchases and by extension lower revenue for firms. At the same time, soaring inflation also increases the cost of doing business - further exacerbated by high interest rates - forcing firms to either cut output to maintain margins or reduce profits paid to investors. To complete the devastating cycle, lower investor profits end up sapping their confidence and inducing the flow of money away from the stock market into other money vehicles.

According to data from the Organization of Economic Corporation and Development (OECD), global economic output as a whole would see growth decline to 2.2% this year. Calling the impact of the Ukraine invasion as the "largest energy crisis since the 1970s," the OECD adds that the estimated global GDP spent on energy would roar to 17.7% due to the energy crisis.

Speaking of Europe, the U.K. was one of the hardest hit regions particularly due to the energy crisis. Inflation soared in Britain to a multi-decade high in October 2022 when it stood at 11.1%. At the same time, it started to take a downward trend since then until January 2023 when it dropped by a percentage point by 1%. However, data for February surprised economists as it jumped to 10.4% in the month. This inflation was contributed to a large extent by the restaurant and hotels industry which jumped to 9.2% in February. However, on the positive side, inflation for motor fuels sat at 4.6% in February 2023 as it continued a downward trend from the July 2023 peak of a whopping 43.7%. Broadly speaking, food, non-alcoholic beverages, clothing, and hotels were the biggest contributors to inflation in January and February 2023.

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