King of Leon

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0:37Wake Up To Money from BBC Five Live. Hello, morning. Welcome to Wake Up To Money. Coming up today, what went wrong at the fast food chain Leon and how does it get back on track? We'll hear from one of the company's founders back to try and lead it out of administration. Also on the programme today, it's been a week of announcements for new rail in the north of England, government policy U-turns and charges against the head of the US Central Bank. So our Friday panel will have plenty to pick through this morning. And interest in Veganuary. Going vegan for the month of January seems to be fading.

1:08One plant-based food producer, tell us why they've moved on from the campaign. Wake Up To Money with Will Bain. Morning. Welcome to Wake Up To Money on Friday the 16th of January. Just gone, five o 'clock in the morning. Will with you again this morning. Great to have your company as we round out another week here on the programme. Been a busy week, hasn't it? So plenty for our panel to pick through everything from the GDP figures surprising yesterday for the UK economy. The row we started the week, the extraordinary row, really, between President Trump and his administration and Jerome Powell, the head of the US's central bank, the Federal Reserve, and the impact all of that potentially has had on the global economy this week.

1:46So our panel are standing by to work through all of that. We'd love your thoughts as well, though, as we move through the programme this morning. Perhaps you've got a view on Leon. We're going to hear from John Vincent, one of the founders of Leon, back there now as the chief exec again. Where did it go wrong? What does it need to get right to get you back through its doors again? We'll hear from John in the second half of the programme. We'd love to hear from you any time over the next hour. 85058 is the text number to get in touch and join our conversation this morning or 08085 99693 is the WhatsApp.

2:17Let's get straight to it then because there's plenty, as I say, for our panel to get to. and Lindsay Blakely is back with us. Lindsay, the director and founder of Bumble and Goose Online Bakery based in Bangor, Northern Ireland. Lindsay, morning. Great to have you back on the programme. Good morning. Thank you for having me back. How's business going at the moment? How was business over the Christmas period too? We had a really strong Christmas period actually, which was great after a fairly steady year so far. So we were up about 50 % on the same period last year and up 90 % on the previous quarter, which was quite startling, but very good news for us.

2:53Right. What did you put that down to? Do you know, I'm honestly not really sure. It was a bit of a surprise because, as I say, we'd had a fairly steady year, but not anything overly exciting. And then from September, really, right through to mid-December, we were just completely flat out. 99 % of it to corporate orders. So I think companies are definitely investing in promoting their product. and that was probably the biggest majority of what we were doing. And then obviously customers are wanting to wish their clients well at Christmas and investing in gifts for them, which was also obviously a large part of what we did.

3:28Yeah, I was going to say, I should explain as well, because that's a huge chunk of your business really, Lindsay, isn't it? Sort of mass baking catering, if you like. Yeah. So yeah, branded biscuits, branded brownies, branded small cakes, that kind of thing. So customers use us to promote their product, which is, So I suppose it's a good sign that businesses are investing in and promoting what they have and they're happy to spend money to kind of to showcase their products. Yeah, interesting. Alongside Lindsay for the next hour is Justin Onyekusi back with us as well. Justin, the Chief Investment Officer at the Investor St.

4:00James' Place. Justin, morning. Great to have you back on the programme too. Morning. Thank you for having me back. Is it a couple of weeks of surprises, do you think? I was thinking yesterday, I was just looking at Fuller's in your world, stock market world, investment results from our big companies. Obviously, strong Christmas, perhaps not a surprise from the supermarket. Stronger Christmas in terms of some of the other retailers as well. And then Fullers and people who had been very worried about Christmas, I suppose, perhaps doing a little better than we feared. Is that fair? I think that is fair.

4:31I think there's been an upward surprise, particularly in the core retail products. I think luxury retail had more of a challenge. but those core retail businesses, and we're still looking at trading updates from the Christmas period. Actually, we're seeing a surprise slightly to the upside for some of those stores, actually telling us the economy overall seems to be in pretty decent shape, which is obviously a clear positive for the future. And the final member of our panel this morning, or for the first half an hour, at least is Frances Haack, Santander's chief economist as well. Frances, morning.

5:14And just in terms of the upward surprise, as Justin put it there, if we sort of zoom out and take the economy as a whole, that GDP number from yesterday, very much that, right? Yes, good morning. That was a nice surprise to see November being better than expected. and hopefully, you know, that will then translate through to the end of, well, end of 2025, obviously into 2026. So, yes, it's nice to have some positive news for once. Yeah, well, we will dive into that in a bit more detail in a moment, that topic, because we're going to start talking about those investment plans that we were touching on a little bit earlier in the week in terms of, in particular, rail upgrades in the north of England.

5:55But that kind of confidence, that feeling that the guys have been talking about, that often, you know, if we strip back the economic jargon, And it means you out there listening and how you're feeling in terms of not just with your companies and how you're running your businesses, perhaps, but about your own spending, whether that be out and about in hospitality or in stores. So do get in touch with us and we'll try and weave some of your texts into that chat when we come to talk more broadly about the UK economy in a few minutes time. So 85058 to get in touch doing that. Let's kick off, though, as I mentioned, with that announcement from Rachel Reeves, Chancellor earlier in the week, setting out a vision for rail improvements across the north of England.

6:29Government committed an initial£1.1 billion to sort of bring the scheme to life, if you like, which will begin electrification between in Yorkshire, sorry, between Sheffield, Leeds, York and a new station at Bradford as well. Then the focus will shift to a new route between Liverpool and Manchester via Manchester Airport. So these are sort of phase one, then phase two. And the final phase is to link those two bits up. So Yorkshire and the northwest separately, a new line between Manchester and Birmingham. to replace the scrapped HS2 northern leg, but the government cleared that no work would start on that until those former bits I mentioned were completed.

7:09Up to as much as£45 billion could be spent. That's where the government set the cap at, although they will allow local authorities to top that up in some of those areas as well. A little bit earlier this week, we had Tom Forth back on the programme. Tom, the chief technology officer and co-founder of Data City, Leeds-based company specialising in economic data, and he was pretty positive about the plans but warned that longer term goals might not be quite as realistic. Well when I was thinking about it I sort of went back in time to 2014 so Northern Powerhouse Rail was announced by George Osborne and the plan was we'd have a brand new railway from Liverpool to Hull via Manchester, Bradford, Leeds and that would be opening in 2030.

7:46In the 12 years since that precisely nothing has happened and this is the announcement that I think tries to say let's see what we can actually do. The bits that are announced to happen within this Parliament seem pretty good to me and I believe they'll happen but phase two and phase three bringing back HS2 get less and less believable as you go on. Justin what did you make of what was sketched out and the cynicism around it that Reggie Reeves herself was kind of taking on with us on the BBC on Breakfast a little bit earlier in the week too? So firstly being originally from Manchester I think it is it's shocking right that it takes a shorter amount of time to get from Newcastle to London than it does from Newcastle to Manchester.

8:30So the rail infrastructure in the north simply isn't there. I think the challenge with this, these plans, are that the Yorkshire bit, that phase one you mentioned, doesn't actually start until the 2030s, right? It doesn't start until after 2030. That's the plan. So the timescales feel really stretched. And then to think that you have to go through all those phases before you get that Manchester to Birmingham line feels like we're going to be waiting until 20, 40, 20, 50 until that line even starts. So I think, in essence, when you hear the rhetoric, it sounds positive. But the challenges of actually implementing and executing this, as we've seen, the proof is really in the pudding.

9:14And so far, when we've looked at infrastructure build-out in the UK, it's simply been a huge, huge challenge. Francis, just build on what Justin's saying there as well, because for you economists, the government always puts out lots of these impact numbers, don't they? And they sometimes do seem to, you're not entirely certain where they've all come from. £40 billion, I think, was the number that the government had of what they think the boost would be to the North's economy. But as Justin says, not coming for a long time, and presumably that benefit spread as a result over quite a long period of time, if nothing else.

9:48Yes, I mean, it's incredibly difficult when they're doing their cost-benefit analysis, which they are obviously required to do for these types of projects, to really know, because it's over such a long period of time, exactly what the benefits would be. And as you say, it's a sort of drip, drip, drip. The other thing I'd say is, whilst it is obviously a very long period of time, I mean, I suppose it's a question of whether people, and when I say people, I really mean businesses, believe that this is going to happen. I mean, given everything with HS2, It wouldn't you know, it's not surprising to hear that people are a little bit sceptical, particularly about the sort of latter part of this.

10:28I certainly think the first phase is is very likely to go ahead. And, you know, it's already sort of slowly starting. But but if people did believe and it would at least provide some, you know, you can look to the future and say, OK, we know what's coming and plan for that accordingly, which obviously is very important for businesses, particularly those that want to grow. So, I mean, yes, it's certainly a positive, but it is very difficult to be able to quantify those benefits. It's always easier to quantify the costs than the benefits. Right. So in practical terms to what you're saying, because that's really interesting, Francis, basically, you know, to get that actual economic benefit or anywhere close to it that the government's talking about, you kind of do need a company to think, well, if there's going to be this brand new station in Bradford and I can whiz between Bradford and Sheffield and Leeds really quickly, I'm going to set up my new office there.

11:21They do have to see something tangible kind of happening to make that shout or be very encouraged that there is going to be something that happens. Yeah, absolutely. Or, I mean, there are other incentives, of course, that the government could use in order to facilitate that. But, yes, you of course do. If you're going to make investments, if you want businesses to do that, you've got to make sure that they believe it's going to happen because obviously these things do take time. Everyone knows they take time. Infrastructure is, you know, that is part of the problem that we have at the moment, of course, with the economy is that you're looking at a lot of supply side reforms and we know they take time.

12:01You know, it's at least 10 years before you start to see the fruition of those coming through. So, yeah, this is good. I think it's just got to be believable. Lindsay, how important is a business leader that balance then between realism, but also people want ambition too, don't we? When we were talking about this on the programme earlier in the week, lots of people texting and saying, you know, why not to Hull? Doesn't go far enough. Why not quick enough? Why has London got X, Y and Z faster than this? Where's the sort of marrying up in terms of your decision making of having the right level of ambition versus the right level of realism?

12:36Yeah, it is a difficult balance because I suppose having ambition is what drives a business and it's what makes you get up in the morning and go to work. However, yes, you do have to be realistic with the options that are available to you. And I suppose living in Northern Ireland, it's always a little bit different because we tend to be the poorer relatives in most of these departments. So I suppose sometimes for us it's not even as much about large-scale ambition, but thinking more out of the box and thinking a bit more laterally to make things work at our little part of the world. Does physical connectivity, because you're in the right part of the world, I guess, to see that, even at a smaller level, even if it is just speeding up a train line, as Frances is kind of nudging out there, which is basically part one of this system, can it make a tangible impact, Lindsay, in terms of, I don't know, getting to customers, perhaps staff coming to work for you, etc.?

13:30I suppose, again, where we are, we're in a semi-rural location, so there isn't a train line. But even, I don't know, you know, an improvement to a road or a junction or something like that at a smaller level, I suppose, just forgetting that we're talking about kind of a big rail project here. Can incremental bits of physical infrastructure like that make an actual day-to-day impact to someone like you? Yes, absolutely. Well, yes, you say staff coming to work, even deliveries, collections from couriers, that kind of thing. Even the availability of services sometimes is slightly more challenging in our location.

14:05There'd be lots of people, you know, consider because we're semi-rural, would consider it just not feasible to offer a service to our area, which applies to lots of parts of Northern Ireland. So, yes, absolutely. It definitely makes a difference. And Justin, you touched on this then. Is your worry as we sort of round this section out that if it isn't stepped up, I suppose, the pace or the pace isn't kept up, perhaps here, that you won't see companies, big companies, the type of companies you guys might invest in, thinking that this is a good place to move some of their operations? um yeah i think it's very difficult for companies to plan and start to build offices move offices move people move infrastructure when uh uk build outs are so are so uncertain you know it takes it's 250 million on average per kilometer for hs for the the hs2 or from from the hs the high Icefield rail in the UK, international, you're talking about 34 million per kilometer.

15:11The UK land tends to be more expensive, more densely populated country. Legal and planning processes tend to be harder. Lots of tunneling to avoid uprooting people from homes. All of these things are so difficult. And also you have to think because this is so stretched out, you're stretching over a number of parliaments with a number of governments who may make a different decision on spend. So all of these things are really challenging for companies to plan and set up, move infrastructure, move people based on what we've heard. We're going to hear a bit more about that chopping and changing and what that does for decision-making in just a moment.

15:52But Francis, just the final sort of flip of all of that, I suppose, is it good to see long-termism in policymaking? I remember in the run up to the election last year, we had lots of, almost every business sector saying what we would like is a bit more of a long term goal, something we can stick to where we know the direction of kind of travel is, whether that be in infrastructure or actually just things like industrial policy as well. Is it in that sense refreshing to see a bit of long termism, even if it does raise the question marks that we're about to come to? Absolutely. I mean, you know, certainty is a backbone of the economy, really, along with confidence.

16:35And if you have certainty, it starts to bring confidence as well. So, yeah, it is very, very important. And it is good to see. And one hopes that then maybe in other areas, we might see some more long term planning. Yeah, Greg in Plymouth, definitely one of those who would like to see a bit more long-term planning. He's with you, Lindsay, here as well. Greg's text in on 85058. Once again, we're hearing how badly the north is treated by the railway. Try living in the southwest with its single line, which closes frequently due to the weather. If you, like Greg, would like to join the conversation, 85058 is the number to do so.

17:1008085 909693 on the WhatsApp. Francis kicked us off with this, didn't she? Talking about the UK economy, the surprise growth for the month of November. 0.3 % up from 0.1 % contraction in October. September, which had previously registered a 0.1 % contraction, was also revised up a tenth of a percent growth. Callum Pickering is chief economist at the investment bank Peel Hunt. He gave his reaction to the BBC. The economy is not going home. It's not going extremely quickly, but actually not as bad as we thought. There's one big effect in manufacturing, which is in Jaguar Land Rover, the restarting of automaking.

17:49But the main story actually is services, so spending at home, just turned out to be a bit better than expected, a bit less of an anxiety effect. Justin, what was your overall takeaway on the numbers? Yeah, pretty positive, actually. You saw that essentially the growth numbers came up above most economic expectations. Growth has been challenged globally, And so it was a real policy. I think there's a few things that stand out to me. It shows that making forecasts on the overall economy are extremely, extremely difficult and especially short term forecasts. I think one thing that we've been thinking is when we think about the balance of probability, so to speak, so thinking about where is there, what's the likelihood of recession?

18:43What's the likelihood of economic downturn? It feels to us that overall, the economy, it feels more positive from an economic perspective globally. So what we've done more recently, our overall view on negative economic growth has lessened. So we think there's a less chance of recession going forward. And so it's a more positive outlook overall. Frances? Yeah, I would certainly agree with that. I think there does seem to be a bit more positivity coming through. and you see that in other obviously other indicators that we'd look at I do like the way about the forecasting unfortunately I was just going to say unfortunately I still have to produce whichever way you look but yes obviously it does make it slightly more challenging but you know things like confidence indicators which actually are quite key to understanding what might happen certainly in the near term have improved a little bit as well.

19:49So, you know, lots of things to look at other than just obviously the GDP numbers, which of course are backward looking anyway. So I think, you know, I would hope that moving forward, now that we've got a bit more certainty, and of course we haven't got the spring or we won't have the same run up to the spring statement that we had last year, which I think hopefully will help businesses as well, that people feel a little, businesses certainly feel a little bit more confident and and then households too I mean the one thing that that I would say is you know households now households have not been spending as much I mean you see it obviously slightly in the in some of the retail figures that come out but they are sitting there with savings we know lots of people have repaired their balance sheets over the last few years and they they probably are ready to spend but you need to be confident in the economy and your jobs and all the rest of it in order to be able to do that.

20:47So I'm hoping that over 2026, you know, we we've been here before where we thought that, you know, people would start to spend and they haven't. So, you know, we always have to take things with a slight pinch of salt. But we are, I think, all hoping that that consumers may may start to loosen their purse strings again and we'll get, you know, a bit more growth. And then the other thing I would say is just building on the sort of global side of things. I mean, obviously, you know, we are a, you know, we're a small, open economy and we do a lot of trade. And what happens globally does really affect us.

21:22So if from a global perspective, you know, we are expecting growth to be reasonable and therefore that should help the UK economy too. Yeah, we'll go international a bit more in just a moment. But Lindsay, just to what Francis was saying in terms of business confidence, as you were saying right at the top of the programme, You talk to loads of different companies, don't you, in the nature of your work. So are you sensing that they're a bit more confident? Well, I think that I probably have to draw that conclusion because, as I said, the first two quarters of this year for us were fairly not quiet, but we weren't in that kind of accelerated growth and it was a little concerning.

21:58But definitely from September till the end of December and actually really currently this first two weeks in January, we have really seen a significant uptake in business spending. And I suppose I take that as an indicator that they're not going to be spending on luxuries like branded biscuits, branded brownies, if they're not confident in their own business growth. So, yes, I'm taking it as a positive indicator and hoping that it continues in 2026. And what about spending, the consumer side of it that Frances was talking about as well, Lindsay, you know anecdotally what are you seeing what are you feeling yeah it definitely wasn't as strong as last Christmas now there could have been two aspects to that from our point of view that could have come from lack of consumer confidence but also we obviously have a limited capacity for what we can manage and the really strong kind of corporate side of the business really overtook everything else and our website was kind of sold out from November really for the whole of December.

23:01So it was hard to see those last minute gifting things we weren't able to facilitate this year. But we've definitely seen on the whole over the last kind of six months that the direct to consumer side of our business hasn't been growing at the same rate as the corporate side. And Justin, perhaps put your hands over your ears because I'm going to ask Francis a sort of forecasty type question. But presumably, Francis, the other nudge in all of that is what might happen with interest rates through the first half of the year as well? Yes, yes, of course. And I mean, I think we're all expecting interest rates to fall a little bit more over 2026, which should help businesses and, you know, will help people remortgaging, of course, this year or taking out a mortgage and things like that.

23:48So certainly some benefits there. And of course, we should say that, you know, inflation is coming down as well, which, you know, I think will make people feel better in terms of spending and things like that too. And we're going to talk about some international policy uncertainty in just a moment and what's been going on with the US Federal Reserve and independence and decision-making as well. But, Justin, just on the kind of chopping and changing of government policy, what we had this week again, didn't we, with ID cards, we've had what looks like a row back in terms of what's going to go on with business rates or business rates reliefs, particularly for pubs and other hospitality sectors.

24:26You can go right back to the changes on winter fuel and what that did in terms of setting the stage for some of those budgets Francis was talking about. Forget the kind of put the political rows of all of that aside. Is that what you're talking about when you're talking about that kind of consistency as you were with sort of the decision making in the rail story? Yeah, it definitely is. I think the challenge with when you're investing is trying to assess or trying to get some level of certainty. And I think when you saw a large majority, you felt that the political risk, so to speak, in the UK was going to diminish.

25:09You wouldn't see the chopping and changing of prime ministers. But as you say, we've seen a reversal of the green investment pledge to winter allowance kind of U-turn. We've seen a U-turn on digital IDs, a U-turn on or watered down farm tax, inheritance tax for farmers. So I think it's easy to say that there's been a number of U-turns in decisiveness. however however i think it is worth just stressing that um the fiscal rules which we all know about we've all spoken about a number of times do act as this kind of additional constraint and navigating that is extremely extremely difficult but then there's also the polls right the polls are moving around and and we're seeing that actually a government that came in with a size majority no longer has that, is no longer polling that majority in the polls.

26:09And that's definitely impacting behaviour as they try and test the electorate with different policies. But you're right, it adds to greater uncertainty and it makes it very difficult to plan and invest. Yeah, Frances, quick thought on that. Yes, absolutely. If you want certainty, then you do need to understand that, yes, exactly, that if you make the decision, it's going to stay there. So, I mean, it was never going to be easy because obviously the fiscal position of the UK, you know, is difficult at the moment. And interest rates falling, of course, will help slightly here as well. But, yeah, you need to have that certainty coming through so the U-turns aren't helpful for businesses at all.

26:57And Lindsay, did the kind of will they, won't they of the budget, did that cause a bit of paralysis back end of the year as another kind of example of that? Yeah, I think, I suppose really it does come down to confidence in the economy and that level of confidence impacts on decisions that businesses make, which obviously then filters down. Well, that seems to feed in as well into terms of, I guess, trusting the decision makers, how a process is made, how policy is made as well at a higher level as well. And this week, of course, kicked off with a bang with the U.S. Justice Department opening a criminal investigation into the head of the U.S.