Holding fire

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1:12Save big money at Menards. Wake up to money from BBC 5 Live. Hello, welcome. It is Wake Up to Money. Iran do not agree with President Trump that productive conversations are taking place between the US and Iran after Trump said he would postpone strikes on Iranian power plants. We're doing a five-day period. We'll see how that goes. And if it goes well, we're going to end up with settling this. Otherwise, we just keep bombing our little hearts out. The oil price been moving, bumping around, falling very quickly, rising again overnight. Here in the UK, the Prime Minister has warned against the false comfort of thinking that the Iran war will have a quick and early end.

1:58That was ahead of chairing that emergency meeting with the Chancellor, Senior Ministers, the Governor of the Bank of England as well. We have a minister on the show this morning to speak to us about what the government's thinking is, how it might be, looking at helping small businesses in particular. And we're going to be talking to the business that refreshes classics like this.

2:27Into new versions like this.

2:37Is that refreshing? Stay tuned for more. Wake Up To Money with Sean Farrington. Good morning to you. Wake Up To Money on BBC Five Live on this Tuesday morning, the 24th of March. Thank you for being with us this morning. As we glance up at the screens, as we do every day, you might have noticed just it was making headlines yesterday. The words of Donald Trump sent the oil price plummeting. There is most of the charts you will look at. There is almost a straight line in one direction or another, whether it's stock markets rebounding yesterday, commodity prices, some of them falling. after Donald Trump told the world that conversations had been taking place.

3:24He used the word productive. It's mentioned, as we talked about in our headlines, that there would be a delay and a bit of a ceasefire in one sense of his plans to obliterate, was the word he was using a few days before, the power plants around Iran. He said he'll hold back for five days on that. You look at the front pages of the papers this morning, which of course had been written and printed before overnight reaction from Iran and re-reaction from the United States. But this picture of Donald Trump in front of his plane, arms out, typical stance, Trump touts diplomatic end to the war. Trump, I'll run the straight with Ayatollah.

4:09He said that in that conversation as well. Trump on the, that was in the Telegraph, Trump on the front of the Times. I bet on deal with Iran. The Guardian Trump stalls strikes amid claims of productive talks with Tehran. And the front of the mirror, it's not over. The front of the mail, those words in the mirror from Keir Starmer. And the front of the mail, Trump blinks first. Rachel Winter, partner and investment manager at Killik & Co. Rachel, good morning to you. Thanks, Sean. Good morning. You're welcome. It's always good to reflect on the last 24 hours we wake up to many when it's been such a volatile day and some people heading off to work at this time of the morning and checking in with the investment world as so many are doing at the moment because things are moving so quickly.

5:03Just reflect on a 24 hours. And when we use that word volatility, Rachel, that seemed to be back with abundance yesterday. Yeah, it's been a real roller coaster over 24 hours, actually. So with oil, we tend to see that sort of$100 per barrel mark is a very important level. If we go back to yesterday morning, oil was over$114 per barrel. And then we had this social media post from Donald Trump. It dropped very sharply. It went down to about$97 per barrel. And then we had these reports that actually there haven't been any direct talks between Iran and Donald Trump. and overnight oil has gone back above$100 per barrel.

5:43So it's around about$104 per barrel at the moment. Bouncing around a lot. I've got Lucia Maguire here in the studio with me this morning, Managing Director of TVD Group, audiovisual company based in the northwest. Lucia, very good morning to you. Good morning. Thank you for being with us. Just remind us, just when I say audiovisual company, what is it that you guys do at TVD? We work across a whole spectrum of technologies from LED to digital signage to video conferencing. So lots of things normally on the commercial front. So there's the electronic supply chains behind you and the delivery of all these products in front of you.

6:21Absolutely. Which part of all this in the last few weeks has really changed maybe how the conversations you're having with those partners that you'll have in the industry? Yeah, so we install nationally. So initially there is that fuel issue for us. our engineers travelling up and down the country. We import from China and Turkey. So sea freight, air freight, huge for us. We were already finding component challenges for memory, for example, which is a huge cost increase due to the demand for AI. And so that continues and is just exacerbated by the situation, basically. And so when you see a day like yesterday, Is it a business that you're running where if the oil price is$120 a barrel or$90 a barrel, actually you almost know what difference that makes to your costs?

7:16For us, it's not so much the spikes or the peaks that, you know, if there was a flash in the pan and that was it, then that would be okay. It's the consistent uncertainty that, you know, it's really hard to manage. We could do with some stability right now, which I'm sure is what everybody else is saying in this world. And do you sort of feel like there's almost a measure of that uncertainty? Before the war began, were you feeling a little less uncertain about things and do you now feel more uncertain about things? I think towards the end of last year with the budget and the length of time that took to come through and the impact of that, I felt like going into this year and it's our new financial year at the beginning of Feb for our business, I felt quite positive.

8:04I've done the budgets and obviously that has changed things quite dramatically. So, Rachel, you multiply that out, what Lucy is doing with her business there, across all sectors. What does a day or a 24-hour period, not even a 24-hour period is it, that we've had with those moves where, as you mentioned, Just to take the oil price as that example, it plummeting from 116 almost dollars a barrel to down below 98 dollars a barrel. And then overnight, those words, particularly the words from those in Iran, or at least the ones we're hearing from Iran, Iran's parliament speaker denying that discussions between the US and Iran have taken place, calling it fake news.

8:48Then the oil price going back up again above 100 dollars a barrel. How does that volatility impact the uncertainty that people running businesses have? Well, I think it makes people feel quite nervous and that makes them want to delay decision making. I do think most businesses will tend to buy oil or energy reasonably far in advance. So they might not be impacted immediately if you get a sort of 10 % intraday movement in the oil price. But I still think it causes uncertainty. and just generally speaking, I think the fact that energy prices have risen, it's likely we'll have higher inflation and therefore it's likely we'll have higher interest rates for longer.

9:29I think those sorts of things do prevent businesses and individuals from making decisions. Lucia, we've got a small business minister, Blair McDougall, coming up on the show a little bit later. There's clearly a lot on the government's plate at the moment. Having these emergency meetings and when you see who's attended them, when it's the Bank of England governor and the chancellor and all the ministers, And they're having to consider energy and interest rates and household costs, what happens on supermarket shelves, food supply, job prospects, all of this kind of stuff. For you, whether it's running your business or seeing the world that you're working in, what's the thing that, almost the question you would have for a small business minister that you feel they need to grip?

10:12Oh, that's a difficult question. It is a really tumultuous time at the moment for them. I don't envy their position. I think it's more about how do we create this level of stability and more resilience, you know, so obviously we're massively impacted by lots of different things going on globally at the moment. And, you know, within Britain and within our businesses, we're just having to completely react to that all of the time. So it's that burden on businesses. How can we create resilience within our businesses, within our framework in the country so that we don't have to be as reactive all the time?

10:48Do you feel like we're any more resilient when you look at, say, the energy price spike crisis that we had when Russia started its full-scale invasion of Ukraine? No, I don't feel that, no. And so, yeah, that may well be something that we can get into with the small business minister a little bit later. If you have topics, issues, questions for Blair McDougall, get them in 85058. Please do. We get your thoughts every day. We know a variety of things that are top of your mind. But if you want to get that, it's a very specific question into them this morning. Please do do that 85058. Let's just reflect a little bit on the latest developments in Iran because it is one of those mornings where things have moved along after those comments from Donald Trump yesterday.

11:37So this was Donald Trump speaking to reporters outside his Air Force One. So the discussions took place yesterday. They went into yesterday evening. They want very much to make a deal. We'd like to make a deal too. We're going to get together today by probably phone because it's very hard to find a country. It's very hard for them to get out, I guess. But we'll at some point very soon meet. We're doing a five-day period. We'll see how that goes. And if it goes well, we're going to end up with settling this. Otherwise, we'll just keep bombing our little hearts out. So that was Donald Trump talking yesterday about what he says with those conversations that took place the day before.

12:24Since then, Iran's parliament speaker has said No discussions took place. Fake news is being used to manipulate oil markets. Rachel, on that topic, I know these are words from Iran's parliament speaker at the moment. Was there any signs or is there any feeling in the investment world that these words are to actually more to move markets, i.e. reduce the price of oil so that the knock-on energy costs aren't as high, as opposed to reflecting actual developments that have occurred in this war? Sadly, yes, there have been a few rumours of possible insider trading over the last few hours. So if we look about 15 minutes before Trump's statement came out saying that discussions had taken place and the oil price dropped over 10%.

13:21Before that post was made, a lot of bets were taken out, betting that the price of oil was about to fall. So a lot of people made a lot of money when that actually happened. So that has led to some speculation that perhaps there were a few people that knew what Trump was about to say. And so taking a step back and looking more generally if things like that are suspected, because we obviously don't know the specifics of this situation, you can see what is happening on the charts and many have been talking about that. Would there be a next step that you would expect regulators to be doing if there were questions over that?

13:58Are there ways to get answers? You'd like to think so. I mean, you'd like to think they would go and have a look at who made those bets, who owned the accounts. Are they someone who was close to the Trump administration and therefore is there a possibility of any insider trading there? So that's one aspect of the consequences and the questions being asked about Donald Trump's comments yesterday. Since he made those comments and Iran has come back and made the point that no discussions have been taking place, we've had people in Iran sending their reactions to the BBC, voiced by BBC Persian. We're happy that it was postponed.

14:40We feel hopeful. I think this will be very costly for the Iranian people. Whether the Islamic Republic remains or realises that it's on its louse legs, it will increase the cost to the Iranian people as much as possible. I think he wants to give the Iranian leadership another ultimatum. If they don't open up the Strait of Hormuz, he will strike because he wants to put pressure on them, either by capturing Khark Island or by attacking them on land. We've got Megan Sutcliffe with us, who's Principal Analyst for the Middle East and Africa for Sibylline. And Megan, good to speak to you again. Thank you once again for your time.

15:18Our audience may well be familiar now if they've been tuning in these last few weeks. If you have a question throughout the week, we will at some point probably catch up with Megan and get some very, very clear answers to our questions. Megan, I wonder just hearing those reactions from people in Iran more widely, what is happening for people in Iran at the moment? given for all our talk of oil prices and following Donald Trump's words, very much on the ground, there is a war going on. How is that impacting people across Iran? Good morning, Sean. Iran is already a very challenging information space to be working in because freedom of the press is not something that is widely observed.

16:05And so it is challenging to establish exactly what people feel and how they are living their lives. And that's only become more difficult during this conflict when the government has implemented a 21 day Internet blackout that has been very effective in cutting Iranians off from the world. But many of your colleagues over at BBC Persia have been working extremely hard to bring testimony to the wider world. And what it would appear is that people within Iran are primarily concerned with their safety because all of Iran's major cities, particularly those in its west and its central areas like the capital, Tehran, are reporting almost daily airstrikes.

16:43They are reporting explosions occurring throughout the city. And when we're looking at areas like Tehran, we're also seeing Israel engaging in airstrikes, targeting checkpoints manned by the IRGC and the Basij militias, which means that airstrikes are targeting major roads and potentially impacting civilians there. There is a sense of concern among Iranians essentially as to where this conflict is going. At the beginning of the conflict, we saw US President Donald Trump and Israel's Prime Minister Benjamin Netanyahu saying that this airstrike campaign aimed to lay the foundations for regime change for a popular uprising and that people should rise up once the bombs have stopped.

17:23Whether or not that will happen, though, of course, waits for the bombs to stop. And right now it doesn't appear that that's the case or the most likely outcome. at least today or tomorrow. What do you make, Megan, of the words of Donald Trump that effectively the United States have been speaking with somebody or some team, not named? He wouldn't talk about who it is, but when in those questions that he received outside his aeroplane, he said, you know, it's not the Ayatollah and they're not the new supreme leader. Nobody's seen him yet, he said, but we are speaking with people. Who might that be?

18:07That is a very good question. We genuinely have no idea as to who in Iran may or may not have been speaking with the United States. Generally speaking, though, external engagement is handled through the foreign ministry, and that tends to be led by the foreign minister, Abbas Argachi. It's also possible that other figures within Iran's major bodies, like the Speaker of Parliament, Mohammed Baquer Haribaf, were the ones who were responsible for some kind of indirect contact, likely passed through Oman, who tends to be the mediator for these situations. But it's possible that actually what Trump is attempting to do here is to create divisions within Iran's leadership by increasing their concerns, their paranoia that someone within them is attempting to talk to the United States and provide an alternative pathway for conflict de-escalation.

18:59Given that Iran's leadership is heavily centralized and is primarily led at this point in time by the IRGC, defection from that would be extremely concerning from their perspective. So while it is possible that Trump is talking to someone from the foreign ministry, it is also possible that this is him essentially attempting to maximise psychological pressure on Iran's leadership amid what is already a very challenging time for their continuity. Yeah, and as we sort of reflect, you know, scrolling through the BBC's live page on this when we wake up in the morning where, you know, one of the best places, if you have the time with a cup of tea to figure out exactly what every step has been while you've been sleeping, at one point about 10 past three this morning, there was a report from CBS which is BBC's American news partner saying that Iran had received points from US mediators so that amid all of these conflicting reports about what negotiations have and haven't taken place a senior Iranian foreign ministry official told CBS that we received points from the US through mediators they are being reviewed and CBS then went on to clarify that this step was taken as a potential precursor to talks, that talks are not confirmed or underway.

20:20So would you expect that to be occurring anyway? If people see the headlines, Trump talking about obliteration of power plants and Iran responding saying, you know, we will then double down on desalination units, crucial water supply infrastructure for the region if that happened. Can there be conversations occurring at the same time in the background? There absolutely can be conversations occurring in the background. We know that for many years there have been diplomatic back channels between the US and Iran, even during periods of significant tension. And often those run through Oman, a regional mediator, sometimes they involve Qatar.

21:02These latest rounds of alleged talks and passing back and forth essentially of diplomatic notes is also believed to involve Turkey, Egypt and Pakistan, all of which to lesser or greater extents have working relationships with the United States and with Iran. So in essence, it is part and parcel of what we can expect from the Trump administration, essentially bombastic rhetoric on one hand, claiming that all incredibly important military infrastructure has been obliterated and destroyed, that strikes will only escalate, while on the other hand, we also possibly see tacit diplomatic engagement. It is worth noting, though, that Iran did acknowledge that there had been diplomatic notes passed to it, that the US had reached out with talking points, but that Iran had not responded to those talking points.

21:52So it's possible that there is an incongruence here between the US and Iran regarding what exactly constitutes diplomatic engagement and what constitutes progress towards an agreement. Megan, thank you once again for your time this morning Megan Sutcliffe, Principal Analyst for the Middle East and Africa for Sibyline 85058 if you have questions for anybody we're speaking to on Wake Up To Money we have the Small Business Minister coming up so now is your chance to get those questions you might work for a small business you may run a small business you don't need to do either of those get your questions in the ministers will be sitting around having conversations about all aspects of government no doubt at the moment So if there's one part of this, you might wake up and see headlines about heat pumps and plug-in solar panels.

22:41That is one of the top stories on the BBC website this morning and wondering how that might work for you. Do get your questions in and we will put all of them to the small business minister coming up a little later. Lucia, I was interested when you talk about resilience. I just wonder what that means in a world where every year no doubt every time I've spoken to you in recent times there's been something and you weren't alone in their feeling through January this year didn't necessarily play out in the numbers but bosses we spoke to that the sort of glimmer maybe it was just hope of some kind of a calmness but of course that's all disappeared now with all of this so what does resilience mean in the world of business when you can have global crises or domestic crises year after year after year?

23:36Yeah, it is very tricky to define, but I think that having an infrastructure there, for example, energy, we've been talking for a long time about how we're going to move to, and as a business we have actually done this too, so we have some electric vehicles, we've got solar panels and things like that. That makes us more resilient as a business in these times. we're able to manage to a certain extent some of those costs. But as you said before, our supply chain, our customers and their confidence. So it's really about being able to take measured actions when these things happen rather than the fluctuations of the market and us all having to sort of move with that and this massive level of uncertainty.

24:21How do we mitigate some of that? Have you been able to move towards electric and solar panels as much as you would like as that works? Not completely. We haven't moved our full fleet of vehicles to electric yet. The infrastructure around that, that's one of the other things there. You know, a really good point is that, you know, our vehicles travel up and down the country doing installations. They're carrying goods. They're using more energy because of the weight in the vehicles. So we need them to get there on time. Our customers don't want, you know, our engineers to spend half a day traveling to get to them because they've got to recharge halfway.

24:57so that infrastructure is really important around those things. So, no, we haven't been able to fully do that as much as we would like, but that is our intention, to keep moving forward as the infrastructure builds. So do you think that the technology will come with the vans that are able to carry all of that weight and also have the range? Because that really, in the world of electric dreams, when we speak to people who have them, that does seem to be one particular sticking point. Yeah, I think hopefully the technology will come and that will continue to improve as solar panels have, you know, over years and the energy efficiency there.

25:34And also the infrastructure, the charging points, the speed of that going forward and the more streamlined, you know, charging points for the variety of vehicles as well. And what does resilience of supply chains mean? Because that will resonate with so many businesses around the country, wherever they're getting their products from. Absolutely. I mean, I think we were four days into this crisis and one of our suppliers, you know, was coming to us with bad news already about our June production, for example. And where in the world was that supplier? They were, you know, more in the Middle East.

26:11Yes, right. No, no, that's really interesting. You have a supplier there. Yeah. So do you broaden your horizons with where you get your goods from? Is that possible? Yeah, it's quite tricky, though, in the short term, isn't it? I mean, how long is this going to last? That's the question, I think, on everybody's lips, isn't it? Do you want to invest all of that time and resource, you know, resourcing, doing quality control checks, going through the due diligence with other suppliers, when in general you have a really good supplier there who is obviously then reacting to what is going on? So, look, I think that is another area of resilience that you need to continue to keep you an open mind when it comes to your supply chain.

26:50Make sure you've got good relationships with your suppliers as well. Rachel, is that something that you've seen more broadly, people looking for a more resilient supply chain, so perhaps changing where they get their goods from? Yes, definitely. We're seeing a lot of businesses ordering goods and services from lots of different places rather than being solely dependent on just the one supplier. Just on that subject of resilience, we also see a lot of firms talking about resilience of the workforce in general. So we are sadly seeing that the workforce is not as resilient as it was. We are seeing a lot more people with longer term physical or mental health issues.

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