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Highlights
- With the recent hike in interest rates, the UK is facing the longest recession since records started.
- The country's GDP is expected to decrease by nearly 0.75% over the second half of 2022, as per BoE's data.
- Chancellor Jeremy Hunt is contemplating a tax hit on dividends, which might help raise approximately £50 billion.
With the recent hike in interest rates, the UK is facing the longest recession since records started, per the Bank of England's warning given last Thursday. The downward spiraling economy is expected to continue moving in that direction well into 2024. During the two-year long recession, unemployment would potentially double up to 6.5%, further darkening the country's economic outlook.
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Amid the rising bills and squeezing real incomes, the country's GDP is expected to decrease by nearly 0.75% over the second half of 2022, as per BoE's data. Escalating prices are expected to drive this decline into next year and the first half of 2024. The government, spending billions to bring the economy back on track, is looking for ways to plug the growing fiscal hole.
Chancellor Jeremy Hunt is therefore contemplating a tax hit on dividends. The move might help in raising approximately £50 billion, and although no ruling has come out yet, Hunt has reportedly demanded administrators to evaluate boosting the dividend taxation rate along with slashing the tax-free dividend allowance.
Amid these developments, UK investors can keep an eye on the following dividend-paying stocks trading on the London Stock Exchange.
Rio Tinto plc (LON: RIO)
The globally leading mining business Rio Tinto plc's current dividend yield offering stands at 11.8%. As of 8 November, at around 8:30 AM (GMT), RIO shares were down by 0.28%, or 14 points, trading at GBX 5,030.00. The market capitalisation of the FTSE100 group at the time of writing stands at £63,026.11 million. Meanwhile, its returns on YTD (year to date) and one-year basis stand at 2.78% and 13.64%, respectively. The EPS (earning per share) of the group lies at 13.03.
Diversified Energy Company plc (LON: DEC)
The gas and oil-producing business Diversified Energy Company plc's current dividend yield offering stands at 11.5%. As of 8 November, at around 8:30 AM (GMT), DEC shares were down by 0.61%, or 0.80 points, trading at GBX 129.70. The market capitalisation of the FTSE250 group at the time of writing stands at £1,100.07 million. Meanwhile, its returns on YTD and one-year basis stand at 24.43% and 24.90%, respectively. The EPS of the group lies at -0.41.
ContourGlobal plc (LON: GLO)
The UK-based electric service provider ContourGlobal plc's current dividend yield offering, stands at 8.5%. As of 8 November, at around 8:30 AM (GMT), GLO shares were trading at GBX 254.00. The market capitalisation of the FTSE250 group at the time of writing stands at £1,668.84 million. Meanwhile, its returns on YTD and one-year basis stand at 33.23% and 32.12%, respectively. The EPS of the group lies at 0.12.
