Payouts from FTSE firms rose just 1.2 per cent year-on-year to £25.8bn for the three months ending June, Capita Asset Services said in its quarterly dividend monitor.
The rise is the smallest quarterly increase since 2010. It follows a bumper first quarter when dividends surged thanks to a bumper payout from Vodafone.
Justin Cooper from Capita Asset Services said: “Headline growth has become a whimper, as the serious headwinds facing investors reasserted themselves.
“Given their size and contribution to the total amount paid out, income investors are a hostage to the fortunes of the very biggest listed companies.”
The strength of sterling was the main culprit, having risen 2.6 per cent over the period. The pound ended the second quarter at $1.71, 12.5 per cent stronger against the dollar compared to a year ago.
The top 15 dividend payers – which contribute 61 per cent of the total dividends in the second quarter – cut payouts by 0.8 per cent.