Rising Pension Gap at U.K. Firms Becoming Stock Market’s Problem

According to UBS Group AG, steps such as reducing dividends and cutting capital spending are the most likely route for chief executives of companies facing widening pension deficits, which for FTSE 100 Index members have almost doubled in a year. So stark are the choices that firms with the biggest gaps are already paying a price in the equity market.

It’s another example of the stress created by near-zero bond rates as central banks around the world struggle to stimulate economies, particularly in Britain, where voters approved secession from the European Union in June. Difficult choices aimed at preserving cash are increasingly a threat to a share rally that has lifted U.K. stocks almost 10 percent in two months.