Splitting the fuel bill?

22:54Felicity Hannah:A much less bad budget. What a winning vote of confidence. let's just have a quick message. We've got one from Richard. He says he's currently on the London Underground. This is about AI. He says, I work for an investment firm in the city of London. We use AI tools like many other companies. It's great for research and other small efficiencies. However, with all this tech at people's fingertips, what's most noticeable is that everyone seems to have become an expert in everyone else's job. So many know-it-alls. Thank you very much indeed, Richard, for that. Loads of you getting in touch with your lending to friends stories as well.

23:28Felicity Hannah:So we'll get to some of those very, very soon. But speaking of friends, it's been very friendly over in the States, hasn't it? China's President Xi has been in the US this week. His first visit to Washington since 2017. It's President Trump talking about the relationship with his Chinese counterpart. President Xi and I have forged a friendship, a truly great friendship, actually built on mutual respect and the vital interests of our people. We have spent time together all over the world from Germany to Argentina, Japan to South Korea and Beijing to Palm Beach, Florida. But remarkably, this is our first time meeting together here at the White House.

24:09And as President Xi has already seen, a lot has changed since he was last here.

24:15Felicity Hannah:Well, a state dinner took place overnight. Would you like to know what was served at the state dinner? I was interested. yellow squash, sesame-crusted bass, braised bok choy and vanilla cremeau. You can tell it's fancy when I can't pronounce it. All on the menu, as were a lot of pretty highfalutin guests served up. So tech bosses like Amazon's Jeff Bezos, OpenAI's Sam Altman, Nvidia's Jensen Huang, Alphabet's Sunderbichai, all in attendance. Lots to talk about, wasn't there? Tensions over AI, trade, although on trade, Treasury Secretary Scott Bessant announced that the US and China will extend their trade truce to January.

24:56Felicity Hannah:The agreement means Trump's lowered tariffs on some goods in exchange for China loosening restrictions on rare earth minerals. And that had been set to expire on the 10th of November. Vic, what do you think? Yellow squash, sesame crusted bass? Would that go down well with your customers? things you weren't expecting to be asked at half past five no i mean our best seller is a chicken in a basket so i'm not i'm not quite sure maybe president she would have liked that you know i i feel like perhaps donald trump might have liked that more we know he's he's quite partial to some some fried food uh george how closely would investors have been watching the warmth at that particular get together um i don't have the honest answer is i don't know with trump anymore because it's sort of so noisy and causes so much of a headache.

25:46You're a bit punch drunk. It does feel like that. Actually, right. I mean, the market really is still just only really focused on Iran. I mean, as you sort of started the show with, you know, cost of borrowing, you know, the UK now spending 110 billion a year on interest costs alone. And it's crazy. Therefore, if we could get a resolution in Iran and oil was going to pull from 100 bucks to$80 a barrel, the impact on that just far outweighs someone drinking yellow squash. Sorry, eating yellow squash. I don't think they were drinking.

26:21Felicity Hannah:It wasn't like they got the Robinsons out. But when you said it, that's what I thought in my mind. It's a bit weird that they serve that. But anyway, nice touch. Yes, I think that's where the focus is on Iran, not on Robinson squash. Linda, I feel like we've derailed this slightly, haven't we? The world's two biggest economies, though. I mean, you know, there is a lot at stake, isn't there, when it comes to that relationship between those two men and just the rising, the ratcheting tension that we've seen in recent years? Yeah, certainly. It's interesting because I think President Trump basically has just said, we're great friends and the relationship is stable.

27:03Well, President Xi's speech, I think, set out much more of where China would like the relationship to head. So he said he wanted to have healthy competition with the United States where they're not wrestling each other down. In other words, he actually said they're trying to compete to catch up with each other. And that's very much an economic concept, which is if you have competition, it's actually good for both countries. But as you know, the issues between the US and China are very deep seated around who wins things like who dominates AI, who's going to be the tech, who sets the tech standards of the world.

27:41And I think President Trump had rejected Andy Burnham's, the prime minister suggested of having a global standard. So that really hasn't changed. And so, I mean, the state visit, pomp and circumstance and all, but it concludes today. And I suspect the most sort of key announcements have already been made by Scott Besant and his counterpart, his Chinese counterpart. So a trade choice until January is great. Some of the loosening of, you know, flows of rare earths, which really do help the electronics and AI sector. I think that's probably about as much as we can expect. I was just thinking about a Cremo.

28:24I only know that because I've been watching Bake Off and Monstership. And I was thinking, now I'm salivating a little bit. I mean, it's early, but yeah, I'm not sure I can get that at Greg's or anything.

28:39Felicity Hannah:So I'm not sure where I'd find one at this hour or any hour, but I'd like to see a Greg's Cremo. If you're wondering about the friendship between these two men, Donald Trump presented a sculpture of a bald eagle, which is the official national bird of the US, a sculpture of that that he said both he and the First Lady Melania had participated in the design of. He likes to get involved, doesn't he, in lots of different aspects of it. Linda, do you think that cooperation on something like AI safety is possible between two countries, two economies that are in such competition? I think that's the hope.

29:21I'm not hugely hopeful, though, because I think AI safety and AI ethics are absolutely key. But even the definition of those requires some degree of cooperation. So one of the hard things about AI is just a lack of understanding for most of us on the outside. But something like AI ethics, that requires an agreement on the parameters, for instance, of the data or the programming or tracking that that goes into AI models. So now you're talking about, in the US's case, particularly proprietary approaches, because that's what documentation actually means. And so I think for them to agree on standards, that's one of the hardest things because they'll be worried about espionage.

30:14You know, the whole competition is about trying to build a system that's better than the other country. The better approach, of course, would be to agree on standards and approaches and, to be honest, documentation, because Gen.AI is a bit of a black box. until you know what goes into it. You still may not know what comes out of it, but it's much better than not knowing what you put into it. And I think that's the premise of a lot of AI ethics. But it's very underdeveloped. But that is actually where the UK could lead because we do so much research and development here. And some of the ways in which global agreements come about these days is that you get a group of countries that begin to set these standards.

30:55If you can achieve a critical mass, than the US and China has come to the table before on things like agreeing services standards because, you know, there's an old saying, if you're not at the table, you're on the menu. So you're either a rule maker or you're a rule taker. But we are far from that point, unfortunately. But I do hope we can make some progress in getting there.

31:19Felicity Hannah:Linda, it's always fascinating to hear your views on the big stories of the day. Thank you very much for joining us on Wake Up To Money. But this is as our Friday resident economist. This is the moment where we let you crack on with your weekend. So thank you for being with us. Thank you. I'll go look for some cremo. Yes, I think we all will. I wonder if the BBC canteen. Linda Yu, economist at Oxford University and the London Business School. Thank you very much. Fall flavours are waiting for you at Whole Foods Market. Cozy picks all through the store. Like maple leaf cookies from 365 brand. Swing by the bakery for pumpkin cheesecake, here for a limited time, and pumpkin turmeric bread freshly baked every single day.

32:01Sip the season with 365 brand cinnamon spice coffee and pumpkin spice creamer. While you still can, spice up fall at Whole Foods Market. Balance your trading strategy by adding futures. CME Group helps you manage risk and capture opportunities in all market environments. capitalize on around the clock access to highly liquid global futures and options markets across all major asset classes visit your online broker and get started see what adding futures can do for you at cmegroup.com forward slash podcast derivatives are not suitable for all investors and involve the risk of losing more than the amount originally deposited and any profit you might have made this is not a recommendation or offer to buy sell or attain any specific investment or service.

32:44Wake Up To Money with Felicity Hanna.

32:47Felicity Hannah:Good morning. If you're just joining us on Wake Up To Money, we've, well, where have you been actually? We've had a fantastic first half of the programme, covered lots and lots of issues. But the issue of the day, the one we'll be talking about just before six o 'clock is lending to friends. When you do it, do you do it? Is it a bit awkward asking for the money back? What is the largest amount of cash that you would ignore asking for back just because it's a bit tricky. It's a bit embarrassing. It's a bit cringe to ask a friend who perhaps has forgotten or has intentionally forgotten loads and loads of you getting in touch about this this morning.

33:21Felicity Hannah:Kevin in Birmingham says, my rule for lending money to friends and family is don't expect to get it back. If you get it back, it's a bonus, but never ask for it back. Trevor in Bristol says, I lent a friend£5 ,000. That's not a small amount, Trevor. He repaid me£1 ,000 and then asked me to lend him another£5 ,000. When I said he would need to finish paying back the first loan before I'd consider it, I've never spoken to him or seen him since or received any money. The moral of the story is don't lend to friends. And one more. Martin says lent a workmate some pounds for food shopping. It's been two months, but I really needed my weekend shift covering this weekend.

34:00Felicity Hannah:Said cover it and we'll call it quits. So sometimes it's worth it. A bird in the hand and all that. Martin, thank you for that. Lots more of you have been in touch. We will try and get through some more of those before six o 'clock this morning. So do keep your thoughts coming. But let me know as well what you think of this. The US President Donald Trump, we've been talking about him a lot so far in the show, haven't we, with the AI and state dinners and all the sort of global impact that he has. But now he's floated the possibility of a 90-day ban on US diesel exports. Now, he's under quite a lot of pressure in the States over the price of fueling up.

34:40Felicity Hannah:He's under pressure from Republican lawmakers who are pretty unhappy diesel prices have hit record levels. And it's truckers and farmers who really bear the brunt of those price hikes. But the US has become a major supplier of the UK's diesel needs since the US-Iran conflict cut those supplies from the Gulf. So if a ban goes ahead, it could mean, well, I'm sure you can imagine, it could mean higher prices here in the UK. Let's talk to Alan Gelder, who's Senior Vice President, Refining Chemicals and Oil Markets at the Energy Market Consultancy Wood Mackenzie. Alan, good morning. Morning. How are you doing?

35:16Felicity Hannah:Well, is it a good morning? Am I doing well? Because I have a diesel engine and I'm just sort of thinking we've seen prices go up so much just this year, haven't we? We're being told that diesel might reach£2.30 a litre by the end of the year. And now this is kind of fresh bad news. It certainly doesn't help. Your fear is well founded if this US diesel ban comes into force. Because given what's happened in the Strait of Hormuz, given the export ban Russia's imposed because the impact of the Ukrainian drone strikes. The US is the big exporter to global diesel markets. And if it chooses to cut those exports, then prices elsewhere are just going to ratchet up.

36:10There's little or no alternative to that.

36:12Felicity Hannah:Now, we quite often say when it comes to oil prices or any globally traded commodity, we say, right, well, the price gets set globally. So, you know, you kind of, as a country, it's very hard to keep your prices down. But I suppose if you're actually just saying, do you know what, we're not exporting our diesel, then in the States you could potentially keep the price down. Yes, you keep the price down in the States because the US refiners, their US diesel demands about 4 million barrels a day. They make about five and a half, along with making other things. And by effectively banning exports, what that means is for about a month about a month or two the u.s refiners will keep running fill their inventories that would lower prices and then they start to run into a sort of a problem in they will have to cut runs that's when things start to but that's when you get the unintended consequences in the u.s but for everybody else um there is no alternative source of supply that can make up for the gap that we would see because of the loss of US exports.

37:25So everybody else, inventories would draw faster. That means higher prices. We're not sure we'd see shortages here in the UK because we have the ability to pay for it, but there'd be shortages could start to emerge in other parts of the world.

37:43Felicity Hannah:Okay. It's all a bit gloomy. Let's get all the gloom out on the table. What do you think this, if it went ahead, would do to prices in the UK? Well, that 230 level, maybe a bit higher. It all depends on how long it lasts, yeah, because there's lots of things that are contributing to this. It's the Russia-Ukraine war. It's the Middle East conflict. And this would just be a further layer that means global diesel demand is outpacing what's available to it for the parts of the world outside the US. The only way to bring that into balance is to reduce demand through high prices. But yeah, that's painful for all those.

38:30It's painful for people who have diesel cars. It's also a drag on the global economy because diesel predominantly is used to deliver the last few miles of delivery. So the cost of everything goes up. So it just feeds into inflation and drags on the economy, which doesn't help the outlook for 2027. So that's pretty gloomy. To add a bit of gloom to the, it's not all joy for the US, because if they're reducing, once they've filled the tanks of diesel, they have to reduce throughputs. That means actually the gasoline production goes down. So quite soon, the US consumer will be paying more for their gasoline because they'll need to import it from elsewhere.

39:14We're not sure where those supplies are. So the US consumer doesn't get away scot-free from this. There's a bit of a time lag, but not that long before US gasoline prices start to rise. And that shifts the political issue away from the farmers to the consumers. That may be the thing that actually prevents this from happening, that unintended consequence of the US gasoline price.

39:42Felicity Hannah:It's one of those, that phrase, isn't it? an ill wind that blows nobody good. We were talking about this on Monday, though, and talking about the sort of the squeeze, the pressure on refineries being what's really pushing up prices at the pump across the world now. Do we not have the ability to refine in the UK? We do, but we don't refine. We just don't refine enough. so if we look at sort of uk diesel demand we probably supply within the uk about two-thirds of it um so we're importing about a third of it that's that's been a long term that's been a sort of a long-term trend it's reflective of your of it's reflective of europe as a as a region and we're importers of middle distillates jets jet and diesel that traditionally came from places like the Middle East and Asia, which now far less through the Middle East conflict.

40:45Felicity Hannah:Briefly, if you can, we've had a message in from somebody who doesn't give their name. He says, how much would the American economy lose from losing exports of diesel? Oh, that's quite a good question. Well, if you just think simply, they're exporting a million and a half barrels a day. the diesel price at the moment, extra-finery gate is about$200 a barrel. So they would be losing$300 million a day through that decision. That is some very impressively fast maths. Thank you, Alan, for joining us on Wake Up To Money. It's very early. If that's horribly wrong, I'm sorry. It's very early. Well, it's been fascinating hearing your analysis and your explanation.

41:27Felicity Hannah:So thank you very much for being with us, Alan. Pleasure. Thank you. Alan Gelder there, Senior Vice President, refining chemicals and oil markets at Wood Mackenzie. Listening to that is George Godber, fund manager at Polar Capital, and Vic Stewart, CFO at The Alchemist, which is the bar and restaurant group. Vic, are you listening to stuff like that and just thinking, oh no, because obviously it pushes up your prices, but it squeezes your customers? Yes, absolutely. You just think, oh, not something else. I think obviously consumer confidence is impacted by those things, But also in terms of supply chain for us, those things just hit straight down because all of our food or drink, you know, we're getting deliveries constantly.

42:08So those sort of things are pretty bad news for us.

42:12Felicity Hannah:Pretty bad news, George, for lots of businesses. It's interesting hearing Alan talking about sort of the last miles of most products being on the back of diesel lorries. You know, this is this is the kind of thing that has a hugely inflationary pressure just across the board. yeah and the other thing that is very diesel dependent is the farming industry so you know every tractor is you know it's not electric so it feeds very very quickly into food prices and therefore into everybody into the costs that everybody's seeing in the supermarkets and Vic food prices that's that's going to feed directly into into your cost so what else are you seeing in terms of of the food products that you're that you're buying you're seeing inflation at the moment?

42:57Felicity Hannah:We know we've had a tricky year for weather. I think what we're seeing right now is it's actually not too bad in terms of food inflation. I think what's coming through to us. But interestingly, because of the impacts of weather and what's been happening this year, we've already been told that next year our chips are going to be smaller. So I think chips, yeah, kind of the length of a chip on average is going to be smaller because the potatoes themselves are going to be smaller. So these are the sort of things that are happening in the supply chain. I think your fresh produce that has gone through this very, very hot summer is going to be impacted when you go into next year.

43:36So we're definitely expecting some impact on that as we head through next year.

43:41Felicity Hannah:A year of short chips. Thank you. This is why we have your Wake Up to Money. This is the sort of the analysis that we can't get anywhere else, Vic. Thank you. Right, let's talk about lending to friends then, because loads of you have been getting in touch. Steve says, lending to friends, be very careful. Small sums,£5 or£10, just give and forget, but learn too. I have some friends who won't tip in a restaurant, so I end up tipping for everyone. It feels like one-way traffic, then they're not friends. Let me see, Jim says, morning Felicity. Regarding lending money to friends or colleagues, my golden rule, if the recipient doesn't return it by the time we agreed, and I have to chase them, I won't lend that person funds again.

44:21Felicity Hannah:I don't think the amount is important. It's a matter of principle. It works for me. What is your limit? There's still nine minutes. Get in touch. And BBC business reporter Sarah Rogers has been out on the streets of Stockport asking punters there about their lending and borrowing habits. I've lent money off my family so many times and I don't think it's helpful. My mum always would lend me money for nights out, shoes for anything. Probably owe her about£3 ,000 now. And did you say you were going to pay it back? Yeah, and I always have tried to chip away at it, but we fell out loads of times about money because sometimes I'd say I'm gonna give you£200 on Friday and I wouldn't.

45:00If someone asks me to lend money, I end up just giving it to them. I do that a lot. And if someone asks for a tenner, I just say, oh you can have it. It's very rare someone will ask for money these days unless they really need it. Fortunately, our five children have got good jobs. I can't see them coming to us more as to them. Oh, they're the rich ones now. I'd just like people to stop borrowing it off me. That'd be great, really. So then I'd have more money. Just stop asking me. That'd be nice. Thank you.

45:32Felicity Hannah:Well, some of us spend anxious hours, clearly debating whether and how to ask our friends for our money back. Other people go out and solve the problem. They create an app that does it for us, one that's already had a plug from Linda Yu earlier on in the show. Let's talk to Jonathan Bittner, who's CEO and co-founder of Splitwise, which is one of the world's most popular expense-splitting apps with tens of millions of users across the world. Jonathan, you're joining us from Rhode Island in the US. So I will say good morning, but good evening to you. Thank you very much for being with us. Oh, it's a pleasure.

46:05I suppose it's morning in a sense. It's great to be here.

46:07Felicity Hannah:Yes, yes. Stay awake long enough. It will definitely be morning. Right. So your company's goal, you say, is to reduce the stress and awkwardness that money places on relationships. Just explain what it is that your app does. Yeah, so when people use Splitwise, they're typically sharing the kind of expenses that people frequently share, going out to a drink or a dinner or a lunch, maybe splitting a flat or living together, you know, spilling bills, electricity, groceries, water, whatever utilities they need to buy. and what they'll do is organize all those expenses into a ledger so that they can keep track of who owes who, why, how much and manage all the payments.

46:50So we also allow in the UK we allow people who can connect their bank accounts to their Sploey Eyes account they can settle up as well so they can get paid back for what they're owed.

47:00Felicity Hannah:I feel like there's an origin story behind this. You're the co-founder of it. Who hurt you, Jonathan? Who didn't split their bill with you? Oh, well, you know, actually, it all starts from love and good things. I was living with my then girlfriend, now wife, and we actually had, we took on a roommate to save money in, we were living at the time in Boston. And we were keeping spreadsheets to keep track of all this. It was less the pain of being stiffed and more the stress of not remembering what had happened. Because I think everyone can experience that. As soon as you've lent someone money or you know you owe someone, you start, oh, I better not forget.

47:42I don't want this to become awkward. And I suppose you could keep a shoebox or stuff them in your wallet, the receipts that you owed. But it's just impractical. And then so instead, you're trying to run home. In my case, I was running home to a spreadsheet, which is ridiculous. So it was a long time ago now that we made Splitwise. At the time, it seemed like there should be an app for that. And so we made it.

48:06Felicity Hannah:So you made it. And clearly there is demand for it. I mean, do you know where that demand is coming from? Is it sort of younger people using the app? Or have you got people of all generations and across the world? It's certainly all generations. I think a lot of people, you know, move into their first place on their own. And they realize, oh, goodness, there's a bunch of bills here. And I don't want to come up short. A lot of people who are of the age that they could maybe travel, go somewhere fun on their own with friends. We have a lot of people whose first experience with split eyes would be like a stag do or a hen do or whatever is your local equivalent.

48:41Felicity Hannah:Oh, we have stags and hens and they can get really pricey. Yes, they can. People, they want to honor their friends, but they're going to go lay out some money. So in situations like that, people find split eyes from a friend. It's mostly word of mouth. We haven't done much marketing and we're lucky that we put in the work a long time ago so that people on Android, people on iPhone, everyone can get together and all just works. And it's been a joy and a privilege to let people experience it. Does it change depending on the country that you're in or the age group that you're in? Do people use it in different ways?

49:18Yes, definitely. I think everywhere in the world, people split things. You know, sometimes, for instance, like in India, it's really popular to split lunch with coworkers and people and coworkers are using Splitwise to split this and that. They go out to lunch together and everyone remembers who paid so they can figure out who should pay next time. In Europe, it's quite popular to split with a romantic partner if you're living with one. And all over the world travel is a popular use case. So there's definitely some cultural differences. But, you know, whenever social gifting is not the right answer, Splitwise can step in.

49:52And that depends from country to country, from even friend group to friend group.

49:57Felicity Hannah:Peter has been in touch to say, my brother always said whenever he lent money to anyone, he saw getting it back as a bonus. And then Dottie says, I've recently booked tickets on behalf of friends. One hasn't paid me despite two reminders. I can't remind again because orcs, if she does pay and turn up, it won't stop being orcs. It's a horrible position to be in. Do you have any tips for starting that conversation? Because presumably, even if you are in a restaurant, you're about to split the bill using Splitwise, someone has to say, let's use this app. Let's split the bill that way. And sometimes that in itself might be tricky.

50:33It's true. It's true. You know, we feel like our role is to make it as easy as possible so that once you get started, it isn't so much of a big to do. But I think that whether you're using an app or not, clear expectations are what we need for this to not become awkward. The awkward part is the chase. If you delay the conversation and then there could have been a misunderstanding about what was going on here. Oh, I thought you were just picking it up. Or I didn't know we were splitting equally or not equally. And so there's an app that's popular in the U.S. where I think the culture can get quite toxic.

51:10You might get a request for money. I didn't know we were splitting this at all. We say that our principles are make a good system. And that could be very simple. Like, let's split dinner or let's split the cost of this vacation rental. And then, you know, you can evaporate the awkward conversations by setting up a good system like an app or even just let's all settle up at the end before we go away. Something.

51:37Felicity Hannah:Has the sort of rise in the cost of living pressures over the last few years had an impact on your customer base, on how your customers are using it? Yes, I think so. So we definitely see more unequal splitting, especially in the UK. We were looking into this just knowing that we were coming on the segment. And the amount of people splitting unequally for, say, a dinner has nearly doubled just since before the pandemic, like in 2018 versus 2026. I think it's becoming more popular to be more careful about not just agreeing to split and splitting, but splitting unequally to, you know, if someone's a vegetarian or didn't drink that night or something like that.

52:15Felicity Hannah:As a vegetarian who sometimes watches people ordering very expensive steaks, I salute that. Jonathan Bittner, CEO and co-founder of Splitwise, thank you for staying up and joining us on Wake Up to Money. Thank you so much for listening. Thank you very much indeed. Thank you for all your messages, by the way, this morning on splitting bills. Thank you, George Godber, fund manager at Polar Capital. Thank you, Vic Stewart, CFO at The Alchemist. Yes, so many messages on splitting bills. I think on balance, you guys are pretty cautious about it. that's it for Wake Up To Money

52:53I'm Steve Bracknell assistant manager of Sunday League powerhouses the Royal Oak FC and I'm back in changing room at Royal Oak for a new season of Games Gone the podcast that takes you back to the grassroots of the game with my colleague Paul Sampson and Bob the Bucke and this season we're aiming for promotion to Division D of the Sheffield Sunday Imperial League. Games Gone, the Steve Bracknell podcast. Listen on BBC Sounds.

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