Eye of the storm

0:00BBC Sounds. Music, radio, podcasts. Wake up to money from BBC Five Live. Hello, welcome to Wake Up To Money. We are waking up to more drama for the US Central Bank. The American Justice Department has opened a criminal investigation into the Fed's chairman, Jerome Powell. He says it's politically motivated. We'll ask what investors think. Then we'll have the latest on events around Iran and Greenland. We'll take a look at the jobs market and we'll chat to a community that's been weathering the weather after a weekend disrupted by Storm Garetti. Wake Up To Money with Felicity Hanna. Very good morning to you.

0:41Welcome to Wake Up To Money on Monday, the 12th of January. It's four minutes past five. It is the 12th of January. It is my first Wake Up To Money of 2026. So I'm just going to say it. Happy New Year. Very, very glad to have your company this morning. I promise that's the last time I will now say it. 12th of January. Officially too late for Happy New Year's. But there is absolutely loads to come in the next hour. We're going to be looking at the latest report into jobs just after about 5.30. So I do want to hear from you this morning. I always want to hear from you. Get in touch and let me know what you're seeing in terms of recruitment, employment, jobs in your workplace or in your industry.

1:19Are you hiring? Are your bosses hiring? Is it slowing down? Are you changing who you're hiring? Maybe you're not taking on as many graduates or school leavers. Get in touch. Let me know what you are seeing change. What's it like in your industry, your workplace, even in your house? You can text me on 85058. You can send me a WhatsApp message on 08085 909693. And if you're on social media like X or Blue Sky, use the hashtag WakeUpToMoney. And I will keep an eye on that. I will also be keeping an eye literally in the studio sitting across from me on our guest today, Matthew Scullion, founder and chief executive of the cloud-based AI and data analytics company, Matillion.

2:01Matthew, I'm really, really pleased that I noticed the Matthew Scullion Matillion. You've basically made the name from your names. Good morning. Yes, that's true. Apart from it wasn't me. It was my wife that came up with that idea many years ago. Most people don't notice you in that smart, small percentage that notice the etymology of the name. But great to be here. Flattery will get you everywhere on Wake Up to Money when I'm in the seat. But yes, you're headquartered in Manchester, just a couple of miles away from the studio. So lots to talk about this morning. There's always a lot to talk about with AI, but also recruitment, loads to come.

2:34And joining us to do that is April LaRousse, head of investment specialists at Insight Investment. Morning, April. Good morning to you. I mean, it's a dramatic morning. We're going to talk about what we're waking up to over in America in just a moment. Is it one of those mornings where while you're brushing your teeth, you do what I do and kind of check out the news pages and then think, oh, that's quite dramatic. Especially when I'm coming on Wake Up to Money. But yes, it's always interesting when you start with an indictment on the Federal Reserve. So I imagine we'll be covering that. We will in just a moment.

3:09Before we do, though, April, I'm sort of curious to know what you're seeing in terms of recruitment. We'll be going into this much later on in the show in more depth. But what's your view as an investor of the jobs market and kind of what it shows us about the economy? I think it's showing you that generally companies are feeling quite reluctant to make any hiring that they're not absolutely certain they're going to need. And this is the same trend in the UK as in the US. And so the jobs data has been really in focus from financial markets actually for some time now. And Matthew, what are you seeing?

3:44I suppose before we ask you what you're seeing, just remind our listeners what it is that your business does. Because I think a lot of people now, they hear AI and they're just like, okay, that's something I need to think about, but I haven't thought about yet. Sure. So Matillion's a software company. We make technology used by large enterprises around the world, many here in the UK. In fact, 70 % of our market's in the US, so we're a good British export story, if you like. Our technology is used by businesses to refine and make valuable their data. and nowadays particularly make their data valuable for AI.

4:21And so a common trope in my industry is that AI is just theatre without data. You have to fuel it and enrich it with data, and our technology makes data ready for that process. And the other side to that coin is the technology itself is AI-powered. So we've been in business for a number of years. I've been on this show before talking about it, and we made technology for human beings to use. But now with AI, the technology comes with the labour built in to augment human teams, which means the same team of human beings can now do many orders of magnitude more work. And what do you think that means for the jobs market, which we'll be talking about later?

5:06I mean, there's this sort of fear, isn't there, that as AI can speed up efficiencies, that that's going to have a bit of a knock on effect on the number of actual human beings that can be employed. Yeah, I mean, I was listening to you talk about the labour market just then. And of course, we've been sitting and feeling this in two ways. One is as an employer here in the UK. And the second one is as a company, very much at the heart of the AI transformation. and to me it seems obvious that AI is starting to make a material effect in the way that businesses consider hiring people and I think most of society is under-indexed on that actually.

5:46I think we're kind of looking for some of the other things to blame or attribute companies hiring policies to but actually AI is starting to make a difference and that's happening at the same time as some of the economic and policy situation, which is also making employers nervous to hire. It's becoming more expensive here in the UK to do that. But also some of the legal stuff going on around how we have to think about hiring employees, I think is also making us more cautious. So you've kind of got two headwinds happening at the same time as regards the creation of jobs, AI and do you need them?

6:23And then the cost and legislative situation about how attractive it is to hire people. It's an interesting time, like the old proverb. Dave has messaged 85058 to say, Happy New Year. Thanks, Dave. AI will take even more jobs in finance, he reckons. And Carol has been in touch on Blue Sky to say, Sun works in SME's software company, closely allied to oil and gas, made redundancies in 2025. No new hires at the moment. They're watching and waiting. As are we. Let's watch and wait and see what's going on over in the US. Because as we've been saying, the US Justice Department has opened a criminal investigation into the country's central bank over spending on renovations.

7:07This is what we're hearing from the Federal Reserve's chairman, Jerome Powell. He also says that this is actually an attempt to pressure the bank into cutting interest rates. Here he is speaking a little earlier. The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the President. This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions, or whether instead monetary policy will be directed by political pressure or intimidation.

7:43While the official investigation appears to be into spending on renovations to Federal Reserve buildings, which we know has been looked at in the past. Jerome Powell says that he's been threatened with a criminal indictment over testimony he gave to a Senate committee. The BBC, I should say, has contacted the Justice Department and the White House for comment on those accusations by Jerome Powell that it is in fact a bit of an attempt to pressure him. We don't have anything back yet. There will, of course, be a lot of political questions around this, But I'm curious, April, to find out what investors make of it, because it's a really tricky situation, isn't it?

8:22The Federal Reserve, like central banks across the world, is intended to be operating free from political pressure. Now, I know you watch the Fed closely. Do you worry that that independence is under pressure? Absolutely. And unfortunately, this story has been ongoing since this administration started. there has been a view by markets that having a central bank that can actually do the right thing for the economy at the right time is critical to having not an inflation problem, to having full employment in the case of the Federal Reserve. And if they're being, shall we say, encouraged to change interest rates for other reasons, then how are financial markets supposed to react to that, particularly the bond market?

9:05So unfortunately, it just adds to this narrative of everything is so uncertain. Do you think that there could be a bit of a backlash from the bond markets, which, you know, for people who perhaps don't follow it as closely as you do, April, this is essentially the cost of borrowing to the US government, in this case, to the US government? If nothing else was going on, then absolutely. I do think that the bond market does not want to see the independence of the Federal Reserve being undermined. The fact is, though, we have geopolitical tensions, to say the least. And that tends to make investors flock to the safety of government bonds.

9:42So actually, you might end up not seeing a very big reaction at all from the bond markets, even though this is by itself is a really big story. It's very interesting. And aside from this particular investigation by the US Justice Department that Powell says is politically motivated, according to him, there has been a lot of pressure on him from Donald Trump to cut rates. Yes, there has. And he has been cutting rates away in the committee. It's not his decision alone. Interest rates have come down quite a bit. And in fact, the market is expecting interest rates will get pretty close to about three and a quarter by the end of 2026.

10:17So, you know, policy rates are lower. And frankly, given how strong the US economy is, that seems probably enough. And in fact, there is another rate decision at the end of this month. A lot of investors seem to be thinking that the bank's just going to hold steady, not gut. What kind of data will the Fed be considering? Well, they are looking. I mean, obviously, we had the US government shutdown for some time. So the data is a little messy. And frankly, some of it will just never, will have never been collected. But there is a very much a focus on the jobs market, because that has been really what's been motivating the Fed to cut interest rates.

10:56They are not seeing the same level of job creation. So they are looking at survey data. as we are here in the UK as well, and obviously just general evidence of economic activity. And what they're seeing is a decent economy, but really a slowing jobs market. Matthew, as somebody who is exporting over to the US, is this something that makes you concerned as a business? yeah i think so i mean uncertainty and instability is never the easiest environment to be growing a business in but the pattern's never clear i mean my business is actually accelerating at the moment and that's off the back of ai and so on the one hand you've got something that the playbook says should be really difficult to sell into but on the other hand there's such a demand for this transformational new technology and way of doing business that for every half step back, we take macroeconomically, we take two steps forward with the technology.

11:59But, you know, I think it causes lots of second order worries, doesn't it? People slowing down investment decisions. It affects our team members out there, the US ones and international ones moving in and out of the country. So, yeah, I think that's a read of the situation. There's a lot going on. OK, well, let's talk about something else that's going on. And that is, of course, the national protests in Iran entering their third week. And over the weekend, the picture has looked, well, it's looked like it's intensifying, hasn't it? The human rights organisation Amnesty International has said it's analysing distressing reports that security forces had intensified their unlawful use of lethal force against protesters.

12:42That's since last Thursday. But there is, of course, a nationwide internet shutdown, and that can make it really difficult for outside observers to actually understand what's going on inside the country. Let's talk to Megan Sutcliffe in the Middle East and Africa Analyst for Sibiline, which is a strategic risk advisory group. Megan, morning. Are you there? Yes, good morning. You are there. Good stuff. Thank you for being with us. What do we actually know about the current situation? Well, just as you've said, it's incredibly challenging to verify any of the information coming out of Iran regarding the protests and the crackdown.

13:25But it would appear that over the weekend, unfortunately, it has intensified significantly. Human rights organizations have published reports indicating that over 500 protesters have been killed and that hundreds of bodies have been delivered to morgues throughout the capital in Tehran. It's an extremely concerning situation and it shows that as these protests move from their second to their third week, we're not in a situation whereby these are dying down and whereby the situation may stabilise. No, and it's devastating, isn't it, when you sort of think about people out protesting, trying to make change and ending up in hospitals and morgues.

14:05But Iranian protests aren't new. How does this, what we're seeing now over these recent weeks, compare to other protests we've seen in the past? You're absolutely right that since the revolution in 1979, there have been several waves of protests in Iran, which have sometimes attracted millions of attendees. Most recently, of course, there were the protests in 2022 after Masa Amini, a young woman, died in the custody of Iran's morality police. This triggered weeks of protests of people calling for the repeal of laws that mandated the wearing of the hijab. It was an opposition to the theocratic underpinnings of the Islamic Republic in Iran.

14:48And this resulted in major protests and major crackdowns. When we're comparing that to the protests today, they are certainly different because whereas that protest movement was about an opposition to certain laws within the context of Iran and how the Islamic Republic was enforcing its religious edicts, the protests today are about economic conditions. They're about the rapid devaluation of the Iranian real and the failure of the government to actually address that situation quickly or even at all. It's a protest that cuts to the real lived experience of all Iranians, regardless of their ideology or political leanings.

15:30So it certainly feels different to 2022 and also previous protests, movements that we saw in, say, 2018 or 2009. It seems crass, really, to talk about the business side of this when you're talking about people going out to protest and then potentially not coming home. But I do want to ask you, because I know that Sibylline, as a strategic risk advisory group, your job, as it were, is to provide timely information to help firms manage risks. What kind of industries and areas are particularly interested in what's going on, what we're seeing in Iran? Who's coming to you for advice? Well, there are two levels of engagement when it comes to Iran.

16:16There are firms that many companies in my industry will service that are able to operate despite the numerous sanctions that target the Iranian economy. For example, pharmaceuticals, many pharmaceutical firms are still able to operate within Iran. and so are significantly concerned regarding the safety of their staff as this situation develops. But the overwhelming majority of companies that are concerned about the situation in Iran are ones that are regionally engaged and are concerned about the prospects for an unstable Iran, what that would mean for the stability of the region, but also what it would mean for energy markets, for travel.

16:55So businesses from a variety of industries do have a vested interest in what's going on in Iran, even if they don't necessarily have a local presence. And adding to the complexity of what's going on in Iran is that we've now got the US president issuing, I mean, essentially just outright threats to the regime. CBS is our sister organization over in the States. It's been told that the US president has been briefed on options for military strikes. What's your sense of what might happen there? Well, it's extremely challenging to evaluate because just as Trump said yesterday, he's not made a decision as to whether or not to strike Iran.

17:36And this is extremely similar to the situation that we saw over the summer before the US conducted airstrikes on Iranian nuclear facilities in June during the Israel-Iran war. Essentially, Trump spent days saying that he may bomb Iran or he may not. He hadn't quite decided yet. And it seems that that dynamic of threatening the regime with the credible risk of strikes taking place in order to influence their decisions and their behaviour is something he is more than willing to do, despite the threats that that poses to regional stability. And of course, the dislike of markets for that type of changeable rhetoric, let's say.

18:15Megan, you've made it as clear as it can be in some pretty tricky to analyse times. Thank you so much for joining us on Wake Up To Money. Thank you, Felicity. Wake Up To Money with Felicity Hanna. This week, the US Secretary of State Marco Rubio is expected to hold talks with his Danish and Greenlandic counterparts over Greenland's future. Now, Greenland at the moment, for a very long time, is a semi-autonomous part of the Kingdom of Denmark. But it's got a rich mineral deposit layer. It's geopolitically, strategically very valuable. And that has led to increasingly muscular suggestions from the U.S.

18:57administration that it needs to, in President Trump's words, have the territory. So here was how the president explained at the weekend why he'd rather own it than simply cooperate. Countries have to have ownership. And you defend ownership, you don't defend leases. And we'll have to defend Greenland. If we don't do it, China or Russia will. It's not going to happen. OK, well, joining us now is Sana Vass, a reporter at Bloomberg, covering politics and the economy in Denmark and Greenland. Sana, you're joining us from Copenhagen. Good morning. Good morning. Thank you for being with us. I mean, America has longstandingly had quite an interest in Greenland, But this has been kind of bubbling along, especially since the first Trump administration.

19:43Just remind us how we got to where we're at. Yeah, I mean, Trump, as you mentioned, he's talked about Greenland for quite a while. And Danish and Greenlandic officials are kind of used to hearing his statements of needing control of Greenland. He's been repeated this quite a bit since he took office about a year ago. So now he's really renewed this campaign, and it's almost been daily since the raid on Venezuela that he's talked about needing control of this territory. It's the fact that it comes just after that raid that that's really alarmed Danish and Greenlandic officials. They are very concerned about the U.S.'s military ambitions and the fact that Trump is willing to break international law to achieve his aims.

20:30And the Danish prime minister, Mette Freyksson, she's been out last week saying very clearly, we need to take Trump seriously. So it's a completely different situation than what we've been in in the past year. Because what's quite interesting in this situation is that America already has an agreement going back to the 1950s, a treaty that allows it to put as many troops as it wants in Greenland. And we know that Greenland is trying to open up its mining possibilities to international companies. So what is it that Donald Trump, why does he feel like he needs to own it, to have it, rather than simply to cooperate and carry on in a more friendly and ally normal way?

21:22That is a big question that Danish and Greenlandic officials have been asking all along. As you say, the treaty from the early 1950s that Denmark and the US has over Greenland allows the US to build as many military bases as it wants. During the Cold War, it had dozens of installations in Greenland, but then scaled back. and today the US only has one base in Northern Greenland. Denmark has said it's open to allowing the US to boost its presence. That doesn't seem enough for Donald Trump. He is very obsessed with this needing to be ownership. And why he is that obsessed, you can ask Trump about that.

22:17wants to be remembered in history books for expanding the American territory, perhaps. But Greenlandic and Danish officials say very clearly, you can get what you want without ownership. And then also, as you say, on the critical minerals, Greenland says it's open to business. Please do come and invest in our mining industry or enter trade agreements with us. They are very keen to collaborate more with the US on this, but they are drawing a red line on the need for ownership. Now, of course, I mean, we don't know what Donald Trump, you know, what his reasons might be. It has been speculated that he wants to sort of expand US territory, but that's not what he's saying.

23:04He's saying we need Greenland for national security. And he says not for minerals. What's your sense talking to people in Denmark, in Greenland about how much this is an economic story versus how much this is a defence story? Yeah, I think Trump's official explanation, as you say, is national security. And I think that is still what's very much what Danish and Greenlandic officials assume is the main driver. Greenland sits right in between the North Atlantic and the Arctic and essentially puts it on the front line between the US and Russia. And Trump believes that Greenland is a weak spot in the nation's defense.

23:52Now, a lot of people close to Donald Trump have been talking about the critical minerals and rare earths. Of course, we know that Donald Trump tends also to look at things from an economic perspective. So it is something that even though Trump, he's pushed back on this, it is something that we're seeing clearly is a drive of elsewhere, people close to him. And we're also seeing a growing activity from Americans looking into potential investments in Greenland. Briefly, if you can, is this going to be a crunch week for this situation? because it feels like it's been going on and sort of escalating and the temperature hotting up for a long time, but nothing's really happened.

24:42Do you think we might see some movement this week? Certainly, that's the hope from Denmark and Greenlandic side. The Danish and Greenlandic foreign ministers, they will travel to Washington to meet with Marco Rubio and they're really banking on this meeting to be the star of a diplomatic solution to the situation. They want to use it to clarify things and hope that they can dismantle some of the arguments that Trump is using when talking about needing control of Greenland. Of course, it will be interesting to follow if Denmark doesn't offer Trump anything. It might only just escalate the situation more.

25:22And that's something that lawmakers here are really concerned about. But for sure, something that we'll be following closely this week. Sana Vass, thank you very much indeed for joining us. Thank you. Thank you, Sana there, a reporter at Bloomberg covering politics and the economy in Denmark and Greenland. Matthew Scullion, founder and chief executive of the cloud-based AI and data analytics company, Matillion, still with me. Matthew, I wanted to check in with you at this point because we're talking about all these global uncertainties, all these different pressures, you know, sort of needing to be juggled by businesses, particularly businesses that are working internationally as you are.

26:02But you are a British success story at the moment, aren't you? You're a British tech unicorn. So just tell me sort of what your outlook is at the moment. Do you feel like as the world complexifies, this is going to have problems for you? Or is it a case of opportunity? Yeah, I mean, as a citizen, I worry about all the same stuff we've been talking about through the program this morning. But in business at the moment, times are good for Matillion. We launched a major new technology about nine months ago now. It's something we'd spent a number of years building. We invested about$100 million, several hundred people building it, about a thousand customers advising us on how to build it.

26:48and in doing so positioned our technology and company at kind of the head of this wave as regards the data industry, at least, for the application of AI. So this technology is called Maya and it's a digital enterprise data team, if that means anyone to anyone listening this morning. But basically it means it can do the work that used to be done by human teams and that means our customers can be so much more ambitious with data that in turn is accelerating our business. And so it's quite unusual for a business at our stage for the rate of growth to be accelerating, but that's what's happening to us.

27:26So yeah, it's a weird split world for me. On the one hand, as a person and as a dad and as a citizen of the UK, worrying deeply about all the topics we've covered this morning. But from the business building side of the world, for Matillion and Armire technology at least, things are very good. Do you think about listing in the UK markets? You know, I think liquidity events like listing, there are byproducts of business building. And so I think if the thing that is top of your mind is listing, then you've probably not got your eye on the right prize. As an option for Matillion, certainly we think about that.