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Background: Antipsychotic drugs have been associated with increased mortality, stroke and myocardial infarction in people with dementia. Concerns have been raised that antipsychotic prescribing may have increased during the COVID-19 pandemic due to social restrictions imposed to limit the spread of the virus. We used multisource, routinely-collected healthcare data from Wales, UK, to investigate prescribing and mortality trends in people with dementia before and during the COVID-19 pandemic. Methods: We used individual-level, anonymised, population-scale linked health data to identify adults aged >=60 years with a diagnosis of dementia in Wales, UK. We explored antipsychotic prescribing trends over 67 months between 1st January 2016 and 1st August 2021, overall and stratified by age and dementia subtype. We used time series analyses to examine all-cause, myocardial infarction (MI) and stroke mortality over the study period and identified the leading causes of death in people with dementia. Findings: Of 57,396 people with dementia, 11,929 (21%) were prescribed an antipsychotic at any point during follow-up. Accounting for seasonality, antipsychotic prescribing increased during the second half of 2019 and throughout 2020. However, the absolute difference in prescribing rates was small, ranging from 1253 to 1305 per 10,000 person-months. Prescribing in the 60-64 age group and those with Alzheimer's disease increased throughout the 5-year period. All-cause and stroke mortality increased in the second half of 2019 and throughout 2020 but MI mortality declined. From January 2020, COVID-19 was the second commonest underlying cause of death in people with dementia. Interpretation: During the COVID-19 pandemic there was a small increase in antipsychotic prescribing in people with dementia. The long-term increase in antipsychotic prescribing in younger people and in those with Alzheimer's disease warrants further investigation. Funding: British Heart Foundation (BHF) (SP/19/3/34678) via the BHF Data Science Centre led by HDR UK, and the Scottish Neurological Research Fund.