Anthony Hilton in the Evening Standard

Economists and traders in the City have thought and behaved for some months as if the world is coming to an end, but that is not the message delivered by Britain's listed companies. In the past 12 months, they have paid out a record level of dividends. Given that dividends are derived from profits, it suggests this is not a story of a business world on its uppers.

On the negative side, it may in part be a story of a business world that does not know what to do with its money. According to this script, boards do not want to commit to investing in new plant and equipment because, with all the uncertainty around, they can't see where the demand would come from should their company increase its output. So, rather than have the money sitting around earning nothing in the bank, boards reckon they can earn brownie points by increasing the amount they distribute to shareholders.

But even with that caveat, the figures are impressive. According to Capita, which collates and publishes the data, listed companies last year paid out a total of £6.7. billion. That was an increase on the previous year of no less that 19.4%. Even if the total is adjusted for exceptional items - some special distributions and the resumption of payments from BP as it recovers from the financial impact of the Gulf of Mexico oil spill - the rate of increase was still more than 12%. That is an impressive number in a world of near-zero interest rates and anaemic economic growth, as is the fact that companies raising their dividends outnumber those cutting by a ratio of four to one.

The good news is that this year is expected to be equally good. Capita's forecast for dividends in the coming 12 months is for growth to continue at around 11%, which should be enough to boost the payout in total to £7.5 billion. That equates to an average yield on FTSE 100 companies of 4.5% and FTSE 250 of 3.9%. Should the forecast prove correct - and there is no reason to believe otherwise - the total paid in dividends will go up by 30% in two years. That is a remarkable rate of increase and, given that dividends are the main driver of equity returns in the long term, it ought surely to light a fire under the stock market.

If a 30% rise in dividends does not make shares look cheap, it is hard to see what would.