Getting on track?

0:00Wake Up To Money from BBC 5 Live. Hello, morning. Welcome to Wake Up To Money. Could improved rail networks finally be coming down the track for the north of England? As the government commits potentially as much as£45 billion to improve connections for Leeds, Manchester, Liverpool and York, amongst others, we'll be taking a look at what the plans do and don't include and asking what impact they might have. Also this morning, the Scottish government has announced its budget for 2026. We're obviously pleased to see some additional reliefs coming in to help us over the next three-year period. But I don't think it's a big cash saver that many businesses were perhaps looking for.

0:37We'll have more details on that and...

0:44Out of their military fatigues and potentially on their way to a billion dollar reunion, we'll have more on the business of the world's biggest boy band, BTS. Wake Up To Money with Will Bane. Morning, welcome back to Wake Up To Money on Wednesday the 14th of January. just gone five o 'clock in the morning. We're with you again this morning. Great as always to have your company. Yes, we're also going to check in on the inflation picture in the United States after a year of tariffs there. We had some numbers out after we left you on the programme yesterday. We'll hear potential warning signs too about recruitment here in the UK from one of our big stock market listed recruiters in its financial results yesterday morning as well.

1:21And yes, as we mentioned at the end of the headlines there, BTS, the K-pop idols have announced a 79 date world tour that Billboard magazine, the kind of industry Bible, reckons could net them as much as a billion pounds after they took a hiatus to serve their military service in the Korean army. We'll be chatting about that a little bit later on with a K-pop enthusiast here on Wake Up To Money. If that's you, you can get in touch about that story or anything else indeed that you hear throughout the programme this morning by texting us on 85058 or the WhatsApp numbers 08085 909693 to join our conversation this morning.

2:00To steer that conversation, as always, we're going to have a panel of guests for the next hour as well. And Catherine Jacob is back with us. Catherine, the chief exec of Perlundeen Cinemas, the advertising firm. Catherine, morning. Great to have you back on the programme. Good morning, Will. How's business looking at the moment? It's all right. It's Oscar, Golden Globe, BAFTA and Awards-tastic season at Perlundeen Towers. So lots of interest in films. What have you made of the early awards season? We'll chat about it in a bit more detail, but anything that's kind of caught your eye? Anything that's sort of been stand out and going to get people through the doors?

2:35I think Hamnet will. I think Marty Supreme has been very interesting as well. Who'd have thought that a film about ping pong would do so well? so yeah I mean it's an interesting time for us because it is that time where kind of like the focus is all on those performances some of them quite recent releases like Hamnet so hopefully Jesse Buckley's stellar performance will get people to come because that is a fantastic film but it's going to be a good year for film we're told Marty Supreme definitely aided you'd think by having Timothee Chalamet in it as well a little bit perhaps as well The only man who can make ping pong, you know, vibrant.

3:15Not that ping pong isn't vibrant. I was going to say, don't get the text surging this time. No, I can only apologise. More vibrant. The ping pong ultras, yeah. Sorry, even more vibrant, Will. I apologise. And what about BTS? Are they your kind of music? No, I am not a member of the World Army, sadly. But they have played it inordinately well while they've been away because they've kind of staggered it and done solo projects. So it's not as if they went away completely. they've done inordinately well. Yeah. In terms of kind of piquing that interest every so often and doing that, those kind of individual things, different treatments, you know, and now they're back for a huge tour.

3:57Yeah, potentially. Big year for cinema, big year for BTS by the sound of things as well, big year for tours. Again, been the trend, hasn't it, of the last few years of how you make money in the music business. Alongside Catherine for the next hour, Laura Lambie also back with us. Laura, the Senior Investment Director at Rathbones. Morning, Laura. BTS, your kind of thing? Oh, well, I can think, suffice to say, I'll not be setting my alarm clock to book the tickets online. What about ping pong? Ping pong, yeah, well, I have to say, it sounds interesting. Whether it will encourage me to the cinema, I'm more likely to go and see Hamnet, although I did start reading the book and I did find it a bit depressing.

4:35Yeah, it's not a bouncy little number, is it? I'm not spoiling anything for anybody who's not read the book yet, But no, interesting. Yeah, we'll chat more cinema a little bit later on in the programme with the guys as well, because it'd be great to get kind of Catherine's insights on all of that as we move forward as well. But just mentioned it there, didn't I? We're talking about this on the programme this time yesterday, the kind of ramping up of this extraordinary row between the US Central Bank Chief Jerome Powell and President Donald Trump. That was the backdrop to yesterday's latest inflation reading in the United States as well, because, of course, all of that is steering what in part what is going on with interest rates, which is the beginning of that row between the head of the central bank and the president.

5:16Peter Rupert joins us. Peter's professor of economics at University of California, Santa Barbara, and a former senior economic advisor at the Cleveland Federal Reserve. Peter, morning from us, evening to you. Thanks for being with us. Morning, Will. Thanks for having me. Let's just start with the row briefly again. So this time yesterday, we were hearing kind of former Fed chairs weighing in behind Jerome Powell. And then after we left everybody on the program yesterday here through the day, central bank governors here in Europe, first of all, and then also senior bankers, commercial bankers in the United States as well weighing in on this row.

5:53Yeah, it's, you know, it's a terrible thing. I mean, I think most central bankers and I think most people who are involved, including investors, banks, they really want an independent central bank. And the last thing they want is for a president to say, you know, here's my goal and I want you to make sure my goal happens. I mean, that's not what the Fed is there for. Most central banks are not like that. And, you know, this is not the first time these kind of I mean, this is very much escalated. But back in 1965, Lyndon Johnson called in the head of the Fed, William McChesney Martin, who raised rates even though Johnson told him not to.

6:31And evidently he called him into his house in Texas and pushed the guy. He pushed him and said – he started pushing him around and said, you know, what you've done is despicable. I mean, you know, so I think that it happens. And I think the Fed chair has to stand up and say, you know, it's my job to control inflation and not to promote your policies. Well, to that point, what did we learn yesterday then? Because this was as a result of this row, perhaps an even more watched inflation number than usual, not least because also it sort of marks about a year of tariffs as well. So what did we learn, Peter?

7:08too? Well, you know, you know, well, maybe I'm looking at the wrong data. I don't know. But, you know, people seem to say that the inflation numbers were fairly tepid. You know, year over year didn't change very much. Well, year over year is not a very good measure to look at. I mean, what we really care about is, you know, what's gone on lately. And if you look at something like the monthly number that came out today, you know, if you, you know, if you annualize that, the monthly number, I mean, you know, it was a gigantic increase. I mean, it went from, you know, 1.2 % in November to 3.8 % this morning.

7:46And, you know, that's a massive, massive increase. And if you look at, you know, the CPI, X food and energy, it also went up a little bit. But, you know, what people look at and, you know, what you look at, what I look at are things that we see. And so, For example, if you look at food, you know, food went up 0.7 % monthly, you know, which turns out to be roughly 9 % annualized. And, you know, that's what people are going to care about. And so that is why there's this difference, isn't there, where you've got President Trump saying, yes, inflation is defeated and talking up the economy and has talked up the economy a lot, hasn't he, to start the year.

8:20And yet all these surveys, I spend half my week normally on the on the World Service. And we've had the University of Michigan and others who do these sort of reputable studies every month of how ordinary people are feeling about their finances and about the economy. And they're pretty fed up and aren't seeing any change to those prices, as you say. That's correct. And, you know, housing, housing prices have gone up. Food prices have gone up and, you know, and fuel oil has gone up. So, you know, those are the things that really hit people in the, you know, hard in the wallet. Laura, give us a sort of top line takeaway from what you took away from the numbers yesterday as well.

8:57Yeah, it's interesting what Peter says, because on the ground, inflation has gone up. And that's, you know, the Fed are not going to ignore that. They're also going to be looking at the unemployment data, which, you know, unemployment has risen modestly. Job openings have slowed, mainly, I think, on the back of AI-driven restructuring. And as we spoke about, we've spoken about tariff disruptions. So I don't think the Fed will be in any rush at all to cut interest rates this month. The odds have been cut from 30 % last month to 5%. So I think that's the kind of ramifications globally. And Laura, always worth at this point as well, making that linkage for listeners too, about why what kind of goes on with US interest rates can have an impact on our sort of picture here too?

9:46Very much so, not least in terms of currency. If interest rates in the US look to be higher for longer, it looks more attractive, albeit that the dollar has suffered from other implications. You were discussing previously the challenge to the Fed's independence. Dollar weakened yesterday on the back of that and gold went up. So there's a lot of moving parts in this. But yes, normally higher interest rates in a currency mean that it's more attractive to currency investors. Yeah. Peter, talk us through some of those moving parts, as Laura puts it. How much of its tariffs? How much of it is, as Laura says, what's going on with the currency at the moment that's putting pressure on this?

10:28How much is it other factors weighing into this kind of wider pressure? Yeah, I don't really see much that we've seen in tariffs raising prices. We just haven't seen that very much for lots of reasons. But I do think she's exactly right. I think the Fed is going to – they're going to be wait and see. Labor markets, it is okay. And I think there's just growing uncertainty every time our president opens his mouth. You know, and, you know, saying things like he wants to have a moratorium on, I mean, a cap on credit card interest rates at 10%. He wants to stop, you know, firms from buying homes. You know, all these things are just like, you know, shuffling the market, you know, all over the place.

11:12And, you know, this morning, the CPI numbers, by the way, when they came out, you know, the stock market at first was going up. And then, you know, JP Morgan, you know, had some bad numbers and, you know, the stock market ended up falling. But the market was up at a record high for a while. And so, you know, I think there's a lot of uncertainty. And I just think it would be a lot simpler if, you know, the president kind of stayed out of those affairs. And with things like food, we found that with our own inflation here as well, Peter, not a quick thing to address a lot of the time, because often food inflation is driven by things completely out of our control, right?

11:51Weather and things like that. That's correct. That's correct. And, you know, it's not the Fed's job to make sure people, you know, have cheap food. I mean, that's just not the Fed's job. The Fed's job is to, you know, set expectations so people understand what inflation is going to be like. And, you know, then the economy will come around, you know, kind of not the other way around. How does this row end then, coming back to that, Peter? Because President Trump has said he would pick a replacement for drone power, which was due this year anyway. There's nothing sort of new or changing about that.

12:22But he had said that they would make that pick by the end of January. We're obviously running away with quite a bit of January. We're halfway through it too. Does that calm all of this when we get that name or does that potentially pull more fuel on that fire? I actually think it depends who they pick. If they do pick somebody who's been somebody who I think has said, you know, we should be lowering rates, lowering rates, you know, that they dissented, but, you know, we should have gone down, 50 basis points or even more when everybody else was saying we should hold steady or maybe... So if it's somebody like that that's going to bow to and push the Fed around but I can tell you, sitting on that board there are 19 people, there are the Fed governors and the bank presidents and they're going to do the right thing and I trust them and I don't think the chair themselves can manipulate the rest of the group.

13:17It can be interesting to see whether Jerome Powell now, lots of speculation in the US media that he might now try and stay on, on the board, which wasn't his plan previously. Yeah, right. Interesting. We will dip back into that story, I'm sure, as it moves through and have Peter back on the programme to chat us through it then as well. Peter, thanks as always for your time. Great. Peter, well, thanks so much. Professor of Economics at the University of California, Santa Barbara there as well. Catherine, just give us a quick picture from what you see kind of in your sector at the moment in terms of inflation here are there things still from inflationary in your area no not so much i mean we're seeing a kind of a i mean we've still got the hangover of the budget uncertainty so people are still kind of super cautious not much long-term planning um and in for the cinemas that we work with you know that big inflation piece around um kind of utilities etc that was the the the big the big push that affected them obviously for people who have a food offering that's kind of affected them as well um but it seems to be normalizing she said touching wood very um heavily um it seems to be normalizing it doesn't seem to be the shocks that we we've had previously yeah well let us know what you're seeing out there as well perhaps um in your shop, but also anything that you're buying with your company or perhaps that wage picture as well.

14:47Always good to get a sense of what you're seeing out there as well. 85058 to get in touch with us on that. Or indeed, anything else you hear throughout the programme as well. We'll have plenty more from Laura and from Catherine in just a moment. Right, yesterday we saw Scotland's Finance Minister, Shona Robertson, Robinson, sorry, deliver her final budget before those Scottish Parliament elections a little bit later on this year. Today I present a budget for Scottish families, a budget for a stronger NHS and a budget for investment in Scotland's infrastructure. Our Scotland business and economy editor, Douglas Fraser, talked us through what was announced.

15:24As a tax giveaway, this was probably not enough to change your retirement plans. A rise in the threshold for two of the six tax bands for those who pay Scottish income tax leaves those above average earnings some£31.75 per year better off, but continuing to pay more than you would on similar pay in England. The majority, meanwhile, pay a little less than in England. SNP ministers make sure of it. But if not your retirement plans, could it influence your vote a month after this budget comes into effect? The Scottish Finance Secretary, Shona Robison, hopes so, although she's about to retire as an MSP.

16:01She had a lot to allocate yesterday,£68 billion, yet the changes to tax and spending were small ones at the margins or postponed beyond next financial year. They offered her party something to take to the election trail. There were measures designed to woo opposition MSPs, while she postponed some of the tougher stuff on public service reform and pay for her successor to figure out. Two new bands being bolted on to the 1990s clunker that is council tax Are to raise more from homes valued at more than a million pounds They're mainly in Edinburgh And as Holyrood prepares to take over air passenger tax It's going after those who use private jets Unlike council tax, commercial premises face regular revaluations for business rates And as you'll also hear south of the Tweed, the latest round is proving painful There's money to ease the transition and complex rebates for some but the Licensed Trade Association talks of real anger that there's not more.

16:56Yeah, and on that last point, Alan Henderson, Managing Director of the McGinty Group, which owns pubs, clubs and restaurants in Aberdeen, echoed the idea that some of those rate reliefs aren't necessarily the big cash saver many businesses were hoping for. To be honest, in many cases, because of the current revaluations that have just been sent out in the post in the last month, in many cases, this will just be, you know, taking from one hand and paying back in the other For instance, the relief that we're getting 15 % up to properties up to 100 ,000, I calculated for my business, we have increases on the revaluations of 30 ,000, and these reliefs would give us back 27 ,000.

17:36So we're really not in much of a better place other than it's covered the additional increases that we're likely to have to pay. The fact that we're getting a proper review next year of the whole methodology of calculating NDR for our licensed premises is a good thing. We're obviously pleased to see some additional reliefs coming in to help us over the next three-year period. But I don't think it's a big cash saver that many businesses were perhaps looking for. Laura, business rates obviously devolved across the UK, obviously been a massive issue in England. And sounds like it's potentially going to be a big issue through the beginning of this year and towards those Hollywood elections in the spring north of the border as well.

18:19Yes, I mean, it generates a huge amount of money for government expenditure. So you can see why they are so important and they are so difficult to really give any great relief on. And from the hospitality and leisure industries, this has been a huge burden to them on top of all of the other things. lack of staff, rising energy prices, rising food prices. You know, it's just been a perfect storm for them. So, you know, I think the thing that would help the most, single biggest thing that would help the most would be further reductions in business relief. And it certainly looks as if it might be more, it might happen quicker north of the border than south of the border.

19:06I think the whole of Britain has been clamouring for a review of business rates for many years. We've been discussing it long and weary on this programme. Yeah. Catherine, some sectors have been more vocal than others, pubs being an obvious one. What was the picture for cinemas here in England? It's pretty much the same as well. You know, a worry that there's going to be yet, you know, coming out of, I know we shouldn't talk about it, So, you know, coming out of COVID and then the actor strike, then having a situation whereby rates are going up. And also the revaluation piece as well, which is, you know, to be successful, most cinemas have to be in a town centre because they've got to be somewhere that's accessible.

19:48And I know from other aspects of my life that theatres are worried about that as well, because in certain circumstances, they're older buildings. So they've got high upkeep. and if they're being evaluated on the basis of the fact of how much the building is worth when fundamentally you can only do what one performance a day or two with a matinee it's a it's a really really big concern um that there doesn't seem to be a recognition of the fact that that is a that is a sector under pressure yeah and we're going to hear i think as a result as we were hearing from alan henderson there are lots of people talking about reliefs that have been in place since COVID and whether those can be extended and what governments North and South and Border can do in terms of in terms of aiding those companies with those re-valuations as well as Catherine says.

20:36Laura anything else you pulled out from the budget yesterday as we were saying kind of final one before elections which always make them well watched don't they? Yeah I suppose the only kind of thing I pulled out of it was the from a kind of markets and investors point of view There's a billion pound gap in public capital spending. And the fear, I think, from that is that it might force the government to prioritise or delay infrastructure projects, which you really don't want. It does seem that day to day spending is relying on one off funding and non recurring revenues, which does raise concerns about the sustainability of that sort of spending.

21:18So that that spending gap is a bit worrying. I think investors will be looking closely at that. Yeah, do you sense that that is where opposition parties are going to put pressure on the governing SNP in the run-up to ask them about that? Because at the moment, it doesn't seem that the fiscal numbers necessarily add up, as you say. Exactly. And regardless of who's in power, it may well influence the future tax and spending decisions of any elected government. Interesting. In terms of pressures as well, Laura, the sort of backdrop to everything that's going on policy wise has been kind of slowing down in employing and hiring.

21:57Particularly, we've talked lots on the program, haven't we, about younger employees. But we had what looked a pretty worrying set of numbers from one of the biggest kind of stock market listed recruiters yesterday after we left people on the program. Page Group shares were down just over 6 % at one point, or 6.5 % in fact, by the time the market closed as well. And they had a pretty big warning about what was going on with hiring, didn't they? Yes, all the recruitment companies have really been struggling. I think there has been so many different things that have affected the recruitment. I think employees are moving less, So there's less people looking for jobs.

22:38There's a bit of macro uncertainty, which is extending what they call the time to hire. I think what's also happening is because individuals are perhaps being interviewed for jobs, being offered the job, and then their current employer saying, well, why don't you stay with us and we'll up your salary so they're not moving? So there's a myriad of different things that are affecting the employment sector. and all of it is to do with macro uncertainty. And Page Group are, I think they're fairly resilient, but a weaker performance, revenue's down 11%, profits down 10%. And it's difficult to see how this is going to change.

23:20But yeah, they're having certainly some restructuring and some cost cutting, but it's not an easy market out there. Yeah, Catherine, looking through their numbers yesterday, as Laura mentioned, it was interesting when you got to the kind of chief exec section about the UK because they're an international business, that picture that we've heard about companies not hiring wasn't necessarily brand new. The scale of it was quite striking in their numbers. But that element that Laura was talking about, that us basically employees around the country are also feeling that uncertainty to an extent where we're saying, you know what, I don't want to jump ship right now.

23:55I think I'm going to wait and see and stay where I am. That is interesting and a kind of a twist in this too. Yeah, I mean, I think you move if you feel confident you're going to make more money somewhere else. But if you're in a background of kind of economic uncertainty, and as I said before, that kind of company's acting, people feeling they just want to control the short to the medium. So if you jump to another company, who knows if it's going to work out? So it's almost like it's better the devil you know than, I mean, our particular sector at the moment, advertising, is, you know, WPP. have had a major restructuring.

24:31We've got, you know, a merging of IPG and Omnicom. There's a lot of nervousness in our sector about who's going to have a job, who's not going to have a job, what jobs are they going to be, which could lead to a rise of kind of smaller startup firms, super, you know, highly specialist. But it is a time of deep uncertainty. Is that AI? No, it's just it's an amalgamation of kind of large advertising groups trying to seek benefits from scale on global clients. And budgets from clients as well, specifically in your kind of area and cinemas? All right at the moment. But as I've bored you before, Will, you know, sometimes we do well because the advertising economy is doing very, very well.

25:22even if we've got an average film slate. But if we've got a really good film slate, sometimes we'll beat the average of how the ad economy is doing. Last year we had growth in cinema because we had a really good film slate against the background of a lot of traditional media being par or down. Well, never bored. And we were going to talk about that in a little bit more detail after the news as well. We'll have plenty more from Catherine and from Laura in the second half of the programme where we will. We'll chat a bit more about cinema, get a sense of what's going on there. We're going to talk about these northern powerhouse rail plans that finally seem to be coming down the track and we're going to be talking about the return of the world's biggest boy band and potentially the billion pounds that they could make from their tour.

26:03That's BTS. Wake Up To Money with Will Bane. Morning, welcome back to Wake Up To Money on Wednesday the 14th of January. Our panel this morning are Catherine Jacob, Chief Exec of Pearl and Dean Cinemas, the advertising firm and Senior Investment Director at Rathbones, Laura Lambie. Your text is coming in on 85058. This one, anonymous. The government keeps telling us about all the new jobs they're apparently creating. This is after we were talking about the issues in recruitment. Everyone else keeps telling us the jobs market is a challenge and unemployment is rising. Wonder who we should believe, that text says.

26:39And then one on rates here as well and those reliefs which we were talking about in the context of the Scottish budget. Similar problems it seems as we're seeing in England with these revaluations of business rates. Robert has texted and says, I have run a small business since 1985. My premises have been revalued by the valuation office from April 2026. All my reliefs will be lost as the revaluation has gone above the£15 ,000 relief threshold. I will now be working to pay higher business rates, which will kill any growth in my long established one-man business. Catherine, I guess that's exactly to the point that you were talking about.