FT News Briefing US property industry braces for downturn
Oct 11, 2022
The podcast delves into the struggles of British law firms in the U.S. amidst a fluctuating sterling. It highlights the alarming potential for a global recession due to the Federal Reserve’s rising interest rates. The discussion also covers the U.S. property industry, where soaring mortgage rates are causing a dramatic drop in home sales, resulting in widespread job cuts. As various sectors brace for turmoil, the looming impacts on employment and international trade disputes add to the complexity of the current economic landscape.
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Currency Impact on Legal Sector
- UK law firms struggle to match US salaries, hindering US expansion.
- The strong dollar and weak pound exacerbate this issue, making recruitment and retention harder.
Failed Hiring Attempt
- A major UK law firm's hiring attempt in New York failed due to unfavorable exchange rates.
- Potential hires prefer higher US salaries, prompting some UK firms to consider dollar-pegged salaries.
Global Recession Risk
- The Fed's rate hikes pressure other central banks to raise rates, potentially causing a global recession.
- This aggressive approach by the US raises concerns about global economic stability.