Commercial awareness Flashcards
Recent fall in dollar
Dollar’s rise has fallen back after better than expected inflation report last month - hope that Fed will soon slow down the pace of interest rate increases
Fed chair Jerome Powell gave speech which reinforced this
US drivers of inflation same to be subsiding - price of food, gas and property have peaked
Previous high of dollar
Due to increase in interest rates by the Fed
Makes USD appreciate - hurts developing nations paying for food, fuel and medicine
UK and Europe have possible consequences of recession
Effect of high dollar on Slaughter’s clients
Clients in UK and Europe suffering form the recession might be resistant to engage in M&A activities and IPOs
Important to advise clients effectively on international trade
FTX
Digital currency platform based in Bahamas
Owned by Sam Bankman Fried, as was Alameda Research
Filed for bankruptcy last week
Alameda was given special treatment on FTX for years
Russia Ukraine
Russia is weaponising energy - cutting of gas supplies to Europe and OPEC slashing oil supply to raise prices
Adds to already high inflation in other ares, and unsettles energy markets
Idea of a rebound
But, for now, nearly 30% of the companies in the S&P 500 have seen share prices reach lows
Diversifying energy supply - reliance on Russia down by 1/4 recently
Inflation
Currently just over 11%, target rate is 2%
Inflation expected to fall from the middle of 2023
3rd November - BoE raised interest rate by 0.75% to 3% (have increased from 0.1% last December)
Effect of inflation on clients
Employment lawyers - staff might ask for pay rises above the rate of inflation
Autumn budget
High earners paying additional rate of tax on earnings above 125k rather than 150k
Increase in social security and pension
Cost of living payments to those in receipt of means tested social security
China
Beginnings of abandoning of the zero-Covid restrictions
Shenzhen and Shanghai scrapped the requirement for commuters to present PCR tests
Beijing allegedly no longer sending ill people to centralised quarantine facilities
Xi Jinping seems to be steering policy
China effect on clients
Economic boost after 3 years of zero-Covid policy
Increase in company activity
Important for Beijing office
Class action lawsuits
Grew 130% in Europe 2018-2021
Use of ‘opt-out’ mechanisms
Gormsen v Meta (2022) comprised c.44 million class members
Lack of regulation for litigation funding
Insurance liability
October 2022 - FCA announced many insurers had ‘fallen short’ on handling coronavirus-related business interruption claims
Jan 2021 test case led to £1.5bn payment to smaller businesses
Important cases about larger claims heard in summer of 2022 have not had High Court judgement yet
Effect of class-action increase on Slaughters
Important role in representing clients
Thinking about alternative and innovative methods of defence
Effect of insurance liability on Slaughters
Lots of work to be done in this area
Also important to work with clients to ensure binding policy wordings in the post-covid economic environment
