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Bank of England Base Rate held at 5%

Once again the Bank of England has shown caution, a reluctance to make
the rate cut that is urgently needed because of its strict remit to
control inflation.

But sometimes you have to play it as you see it, take action even if
that action means you’re not doing things strictly by the book. If we
continue with this wait-and-see approach for much longer, it will be a
case of waited-and-wished-we-bloody-well-hadn’t.

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Strong dollar can be a powerful driver of UK dividend growth in 2015

By Robin Geffen, fund manager and CEO 

This year threatens to be a challenging one for UK dividend hunters. Last year saw an all-time record amount paid out in UK dividends — some £97.4bn, according to research from Capita Dividend Monitor. Yet as Capita also pointed out, out the biggest single factor driving the growth in the fourth quarter of last year was easy to identify: the rising US dollar. 

In our view, this trend is much more than simply a one-quarter phenomenon. It is actually the most profound issue to get right as a UK equity income investor in 2015. We believe that the US dollar will continue to strengthen significantly from its current level. This is due more to the US economy’s demonstrable de-coupling from the rest of the world than to a view on the UK. The US has a strong chance of tightening monetary conditions this year without jeopardising growth or de-stabilising its housing market. The same can unfortunately not be said about the UK.

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