Pension promises to 29,000 past and present staff are weighing on investor sentiment. The company has promised them £3.38 billion of retirement payments, but the pension schemes have assets of only £2.57 billion. The shortfall after tax has doubled in the past year from £318 million to £663 million because of the fall in bond yields.
The company is committed to making deficit-filling payments of as much as £47 million a year up to 2029, but its deteriorating financial strength could oblige the trustees to demand faster or bigger payments.
Just when you need all the cash you can in the business is exactly when the pensions trustees come knocking. And a goodly part of this is QE caused of course. Which is rather why, contrary to the Dicktater, we are going to reverse QE at some point.