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0:51morning. Welcome to Wake Up To Money. AI in the spotlight once again this morning. We'll be live in Delhi as global leaders gather there for a major artificial intelligence summit. Also on the programme today is social media addictive to children. It's the question being put to the world's biggest social media bosses at a landmark trial in Los Angeles. We'll have the very latest on that as well. And Lidl is rolling into London Fashion Week with a trolley bag for the runway. We'll be speaking to the designer behind it. Wake Up To Money with Will Bane. Yeah, morning. Welcome to Wake Up To Money on Thursday, the 19th of February.

1:26Just gone five o 'clock in the morning. We're with you again this morning. Thanks, as always, for being back with us first thing. Yes, lots of lines coming down already from this AI summit. We'll be crossing to Delhi very shortly for the latest. Seems the French president, Emmanuel Macron, is one of those speaking at the moment. They're obviously five or so hours ahead of us, so well underway and well into the swing of that big summit there as well. We'll be hearing what they're trying to achieve from that in just a moment or two, as I say. We'll also be talking through all that inflation data that we teed up yesterday on the programme.

1:59We'll break it down and try and work out what's going on next, what it might mean for borrowing rates and what still is sticky, as the economists like to call it, what's still high, what's still driving those prices higher for us year on year. And yes, a little making a splash with a very odd-looking trolley bag type design. We will be chatting to the designer of it about why and why the collab with Lidl for London Fashion Week a little bit later on in the programme. If you would like to get in touch with us throughout the morning, 85058 is the text number to do so. Or 08085 909693 is the WhatsApp number.

2:34Nicola Downing is back with us for the next hour as well. Nicola is the chair of Tease Law and Wealth Management. She's also the former chief executive of the printing and digital business, Ricoh, if you're a long term listener as well. Nicola, morning. Great to have you back on the programme. Morning, Will. Good to be here. Thank you. How are you? How's work at the moment? How's business going at the moment? Pretty tough out there, Will. I think all this political jerking around and uncertainty isn't helping. I'd probably describe it as cautious and quite pressured. There are some pockets of good things going on.

3:04It's not all doom and gloom. It's not all end of the world. But the heavy cost burdens that everyone's having to deal with at the moment from the government does mean that it's a pressure on cash and really kind of really having to be very clear about the investments and the opportunities that we're taking. Yeah, really interesting. We'll pick through that a lot more and the kind of relationship with all the data that we've had this week too. With Nicola a little bit later on this half hour as well, alongside Nicola for the next hour, is Simon French, the Chief Economist and Head of Research at Pamir Libram back with us in the studio.

3:35Simon, morning. Good morning, Will. We'll come to it, as I say, in more detail shortly, but give us a kind of top line from the week because I guess that's been your focus, right? A couple of big data releases. You're right to mention inflation yesterday, but then also a relatively soft jobs report earlier in the week and taken together that tees up both financial markets and indeed listeners, households, to try and assess what the next move is on interest rates for the Bank of England. And that's probably the most relevant economic data of the week. Well, as I say, we will delve into that in a lot more depth over the next half hour as well.

4:07But we're going to cross straight to Delhi for news that's kind of happening. right now as we're live on air because tech bosses are among those as well as world leaders meeting in delhi at the artificial intelligence impact summit and our correspondent arude mukerji is also there as well morning how are you morning will i'm well how are you yeah not too bad thanks it looked pretty chaotic yesterday you and the team's pictures from outside there is a little calmer today well it has been chaotic but i think uh you know just the sheer scale of it all is massive. And I think the chaos from the first day compared to what it is now has relatively calmed down, if I may say so.

4:47I've been here all the days. And, you know, it's basically India trying to put its best foot forward when it comes to AI, trying to basically talk to the world and give out this impression as to why India should be an investment destination, should be the big country to look out for, and how it can really play a pivotal role when it comes to driving AI towards the future as a leader of the global south. And I think that's really been the flavour of what we've picked up so far in the strands and the investment announcements in how the leaders have been addressing this gathering. So yeah, and tell us about some of those leaders who's been there and what have they been having to say?

5:24Well, we've just we're just counting down to Prime Minister Narendra Modi speaking a short while Well, from now, I think it could be in just a few moments. We've heard Emmanuel Macron. We've heard Sam Altman. We've heard Sundar Pichai. So they have all sort of essentially talked about the need for inclusivity. I think that's been the message. We also heard from the UN Secretary General, Mr. Guterres, who essentially said something which has been the big pitch, really, from the global south, that AI cannot be limited to just a few billionaires. It has to be inclusive. And I think that is the message that they are trying to deliver.

6:07Even the kind of announcements that we heard from Microsoft, for instance, where they reiterated their commitment to$50 billion in the global south, essentially suggests or tries to address some of the concerns expressed by this region, where they worry that the increase in adoption of AI has been uneven, The global south shouldn't be left behind, which is why India is trying to position itself and showcase some of its potential as the world's most populous country, as the country with, what, over 800 million smartphone users will. You know, the world's largest youth population and also showcasing some of the some of the sort of indigenous designs that they have been working on, which could help a diverse country like India, for instance, you know, language models and things like that.

6:53Yeah, absolutely. Interesting. I'm just looking at some of the wires from President Macron's speech that you were talking about from a short while ago. Determined to shape the rules with allies. How much has that been kind of talk about what the kind of guardrails are for this tech as well? That's right. And I think that's that's a huge, huge, you know, talking point as well, given that, you know, there have been so many concerns about safety, about explicit images that we've seen on social media platforms. So I think safety and security has been a major concern. That has been a key talking point.

7:28The kind of chatter that we pick up as we go from exhibition hall to exhibition hall, from the delegates who've been coming here. And Will, just a point on that, I think India has challenges which are unique to this country as well, especially when we talk about the concerns about AI replacing jobs. India's IT sector has really gone global in the last several decades. It's a major IT services export for India. And there have been worries about what that could mean for this very lucrative sector, which has generated so many jobs for decades, powered India's economy. And evidence of that anxiety was visible earlier this month when Anthropic, which is also represented here, Abul, by the way, they came out with AI advancements.

8:12And you saw tech stocks in India drop, lose nearly or rather over$20 billion in market value. So I think those are also reality checks as leaders gather here and talk about AI, not just about the opportunities, but the challenges, which really are fairly daunting as well. Yeah, absolutely. Well, do keep following the team. We've got a live page running, I think, on the BBC website as well. Plenty more reporting from Arundh Day and the team through the week. Thanks so much for your time this morning. Arunday Mukherjee there, our correspondent at the AI Summit in Delhi there. Nicola, interesting, isn't it?

8:49Inclusion in AI that Arunday was kind of stressing there and the kind of reasons why India wanted to host this as well. But also then those leaders, the political leaders, that is, rather than the kind of the bosses of these companies, trying to sort of chase to catch up a little bit in terms of setting the rails, setting the tracks for this tech.

9:10Oh, I might have lost Nikola's line. Oh, I'm back. Yeah, no, no. I did just lose you for a moment there, Will. Sorry. I was just saying interesting two things kind of there. Inclusivity for AI. So countries that Arunaday was kind of stressing like India, but also I think you could probably put that across the communities, couldn't you? Not being left behind by this tech. And also of the political leaders that are there, that they're trying desperately to try and sort of shape where this goes, shape the rules for where this tech might go. absolutely i think um certainly from a business perspective anyone that's not thinking about ai and how to use it in their business is going to be left behind um it's a huge concern and we do need to really get on the bandwagon with that and it does create huge opportunities for efficiency and and growth but without guardrails you know you kind of risk your employees just going off and getting data from any sources which may or may not be unreliable um so i think having having I mean, clarity around regulatory frameworks and also your own rules about how you use it and where your data sources are coming from in business is so key.

10:15Simon, is clarity the one thing that's kind of lacking at the moment because we're in this sort of gold rush feeling type moment? I certainly think it's on investors' minds whether the extraordinary amounts of capital investment that is taking place by a relatively small number of huge companies will yield the payback for investors. But I also think, and you got it from Arundi's interview, the distribution of those gains, whether they will go to shareholders, whether they will go to workers, which countries will – I think everybody who engages in this technology sees the – or now sees the possible use cases and indeed experiences the use cases.

10:56But who gathers in economic terms the economic rent, the profit, the value from that? I think it's why governments are getting so involved because they're worried it will be very, very narrowly distributed. I was going to say, well, why don't both of you pick up on that, Nicola first and then Simon? Are you concerned about that, Nicola, that this is benefiting companies and not necessarily workers, bluntly? Well, yes and no. I think there's an opportunity for everybody. The profits, I totally agree with Simon, are going to be concentrated, but they are, as he rightly says, putting a huge amount of investment into it.

11:29I think there are huge benefits to business, though, in terms of lots of manual activity that are done today. Certainly in the professional services world, a lot of research, and it's kind of cutting edge, actually, for professional services. But the risks, of course, are that you don't want to be producing AI slop or generic advice. It's got to be right and it's got to be client tailored. So it's not going to do away with the advisory aspect. But I think it certainly will help with the cost base of professional services firms and IT businesses that I'm working with as well. Simon? If you move the conversation a little bit towards jobs and future jobs, One of the challenges for all economies trying to deal with what is inevitably and is now a disruptive influence is how flexible, how nimble are workforces, labour markets to adjust, reskill, retool?

12:21Because there will, like any other technology transition, it will destroy millions of jobs, but it will almost inevitably create millions of new jobs. And that's perhaps from a UK-centric standpoint one of the things that worries me about some of the reforms of the last decade which have made the UK labour market less flexible, less nimble. It's not the right time to be doing that if you think you're going to have a generational disruption that is going to displace a lot of jobs. Your point about the lack of flexibility as you see it in the UK labour market over the last decade or so, how much of that was factoring in using the jobs data that we got earlier this week?

12:58How much of that is sort of the bedrock to some of those problems, if you like, do you think? Well, it's absolutely the right question because there's a bit of a tug of war amongst economists at the moment on what is driving the rise in unemployment in the United Kingdom. One big US investment bank a few weeks ago put out a report suggesting the UK is perhaps uniquely exposed and overly exposed to the disruption of AI. I perhaps sit the other side of the argument that that may be true on a more medium term view, but the changes in the unemployment rate that we've seen since it bottomed out in towards the end of 2023, moving up from about 3.6 % to now 5.2 % of the population and much higher amongst younger workers, that is almost entirely the frictions to the labour market, the rigidities of the labour market, that employer national insurance increases have introduced, a very significant ramp up in the national living wage is introduced, and of course, the Employee Rights Act.

13:59And collectively, all individually, are good things that I think most people, if asked, think that prioritising low pay conditions in the workplace are all good things. But doing them collectively all at once appears to have created quite a lot of indigestion in the UK labour market. Yeah, Nicola, you were touching on this right at the top of the programme. Is that as you see it? Is it the sort of volume that employers have been asked to take on rather than the individual pieces? Or are there problematic elements still, do you think, within the sort of individual bits that Simon's just picked through?

14:31Yeah, I totally agree. It's the volume, just trying to do so much at once, increasing the cost base of all businesses kind of across the board, whether it's national insurance, whether it's rights of workers or anything else. You know, we're seeing a huge amount of increase in applications, certainly by younger people. So that kind of 16 percent youth unemployment is so awful. Huge amounts of applicants for training contracts and lower seniority jobs at the moment. So it's certainly playing through. But, you know, it's very, very difficult as well to not have clarity about what is coming and what's happening.

15:10this constant rowing back from everything whilst it's positive in some ways you know businesses plan on sort of 6 12 36 month cycles and not having knowledge of what's coming down the pipe is really unhelpful and you've been there nicola at a significantly sized employer does it then make you pause on on what is i guess you know the riskiest thing that you'll do hiring some of them one of the more expensive decisions you'll make? Oh, 100%. Yeah, yeah. Every role is under huge scrutiny. Certainly in the businesses I'm working with at the moment, you know, we've made decisions to defer open vacancies, because of the uncertainty because of not knowing what's happening and the cost increases.

15:52There's also quite a lot of pressure to get really good experienced people still as well, despite those employment figures. You know, we've had sort of complex roles, vacant for quite some while. So it's a really complex job market at the moment. Simon, we had Andy Prendergast from the GMB union on the programme yesterday, very concerned about any kind of sort of move again away from this Labour manifesto pledge to bring the minimum wage for younger workers in line with all workers. do you think that that is something perhaps though now that the government may think is a good idea to slow the pace down in terms of that volume that you were that you were talking about as well just spreading some of these decisions out of it so i heard the comments from andy prendergast i mean i don't agree that um it's not doing damage to the labor market it is now doing damage to the labor market and we have to remember that when the national minimum wage was first introduced in the late 1990s and then the national living wage announced in 2015 introduced in 2016 there was always a and there remains to this day a an assessment body called the low pay commission who look at the evidence and recommend to the government what should happen next because I think one would recognize that over the last we were talking almost 30 years now of a statutory low pay level in the UK.

17:23It hasn't created unemployment over most of that period, but now the evidence is growing, and this is for the Low Pay Commission to provide some pretty blunt analysis, I think, to the government. It is starting to impinge on employers' propensity to create starter jobs, jobs which are now paying close to, it's about 66 % of the average salary. that level was just 48 % of the average salary as recently as 2016. That is a big adjustment for employers to have to deal with in one go at the same time as all the other employer measures that we've spoken about previously. And yet alongside that though, Simon, as well, we saw the inactivity rates.

18:08So these are people not necessarily telling the ONS that they're actively looking for a job but they aren't in work, what people call NEAT. that being stubbornly high alongside this, I mean, 30 % in some of those younger age group categories as well, surely isn't the logic, and Andy Prendergast making this argument, that you have to have some incentive to get those people to go to work as well, and presumably pay is a pretty good one for that. Yes, although it is the relative cost of work versus the relative cost of not working, and there are both sides of that equation that you need to take into account for work incentives.

18:45but I mean the issue here is availability of work not the remuneration of work right now and that will be what the latest labour market evidence is telling you. The broader work incentives picture isn't just the low pay rate as well it's also other things particularly for graduates that are impacting their take-home pay because of course you know the marginal tax rates in some cases very very penal as well that all impacts work incentives so nicola how do you if you were in government how do you sort of iron this out how do you begin to sort of try and tackle this problem because i think kind of across the political spectrum in the last couple of days particularly with the youth unemployment picture there is pretty broad consensus that did it that this is a pretty serious problem and this is at this juncture oh it absolutely is and with a 22 year old son and lots of his friends trying to get jobs i see it every day yeah um i think the government needs to be realistic that the private sector is a huge huge employer in the uk and they need to be incentivizing and enabling those businesses to hire people you know and they're kind of doing exactly the opposite at the moment um with all these raft of measures that are coming in so absolutely slow it down and relax some of them particularly you know when we think about the zero hours contract and the flexible workforce very much in the hospitality and retail sector.

20:10You know, they just cannot afford to take these people on at the moment with these kind of regulations. So it just needs to be relaxed. Simon? I would completely agree. I think put some numbers to this. Since 2016 and the national living wage was introduced, that has gone up by 32 % in real terms, and that is adjusting for inflation. So 32 % ahead of inflation. while productivity over the same period has gone up about 5%. So what you would expect over time is the productivity and the real terms value of pay would move in tandem. So for such a gap to happen, it means additional cost on employers.

20:50Now, perhaps in 2015-16, it was set at a level where that wasn't damaging job creation. I think we have enough evidence, and this comes back in a somewhat circular way to what I said five minutes ago, The low pay commission, the statutory body who report to government on the evidence have to now reflect the pretty clear signals we're getting from the UK labour market. Yeah. Well, I know a lot of you are smaller or medium sized employers listening out there as well because you get a flavour of it from the text. So what are you seeing and what would give you kind of that confidence of the guys we're just talking about to do hiring, to hire particularly perhaps younger people to take that punt there?

21:2885058 is the text number to get in touch with us this morning 08085 909693 is the whatsapp gavin's been in touch from manchester gavin saying morning uh it's all right that these companies are replacing employees with ai but ai doesn't buy things so who do they think are going to be selling products to when all the employees have been replaced who wants to pick that one up is that is that a problem at the moment with the pace of some of the change of this AI, Simon? Well, I certainly think it's the right connection to make that workers are also consumers. And in a consumer economy, in the case of the UK, about two thirds of our economy is consumer spending.

22:06If you have the impact of all of this, which is the returns to capital exceed the returns to labour in the form of wages, then you put downward pressure on consumer is bending downward pressure on growth. So I think, I mean, it's why Manuel Macron is in India. It's why the UK had its AI regulatory conference under Rishi Sunak. I mean, governments are going to get heavily involved in here to ensure the distribution or try and influence the distribution of who benefits from all of this to ensure the consumer's economy doesn't get derailed. 85058, if you have a thought or a question for our panel this morning on the text as well.

22:46Let's move away from the jobs market for a moment. Perhaps we'll talk inflation in the second half of the programme. And it's sort of broadly linked, I guess, to something we're going to talk about now too, because we've been talking a lot recently about falling milk prices and its effect on farmers around the UK. Yesterday, elsewhere on the BBC, we spoke to the chief executive of the international dairy cooperative, Arla. Petitubor confirmed that they have seen some oversupply of milk over the winter period. And that is putting pressure on the wider dairy market and those farmers. So we started by asking him about the seriousness of oversupply.

23:20Well, let me point out 2025 was a record year for both farmers and for other foods. And remember, we are a cooperative, so we are owned by farmers. That being said, so that can be taken away from the farmers. They had a great sailing in 2025. And then the volatility kicks in globally, as always. and that's what we see now there's an overproduction of milk momentarily it will correct itself uh during the year i feel that is what we see in the outlook it's good that we come out now with a dividend uh here because we are cooperative we pay out 99 of all our earnings uh so and that will come out here in march and at least if you're a member of other foods that will be very helpful as i was going to say presumably members are under pressure though as well i mean what is it doing to price?

24:06Well what it does is that we have seen that the prices on the consumer side have have slided a bit and I guess that's very natural it's not the first time we see it the volatility is very strong in our dairy industry I've been the CEO now for more than 20 years and the prices go up and down we will see that on the current dip that the prices will go up again during the year of 26 and that's just how our industry is is working this seems pretty cute though doesn't it we've seen people in kind of the uk papers uh farmers talking about you know making thousands of pounds of losses every time they step out to work yeah i have to i have to say that that in at least in the case of other farmers in 2025 was a record earning year uh for our farmers so i can only speak on behalf of our farmers some of your competitors um muller fresh ways others have talked about potentially pouring milk away is that something that you guys have considered no we we would like to avoid that uh we have seen here over the windows that there's been an overproduction of milk coming from the farm side and there is simply no market in the uk for that milk uh that puts pressure on the market it's not something that we want to see we want to see our good milk great nutrition being used as nutrition and we're doing everything we can we're investing at the moment in Artifoods in the UK, more than 300 million pounds in several of our sites to make sure that there's a capacity for all the milk that the farmers are producing.

25:35Yeah, what are the other kind of lessons, I suppose, from this oversupply picture to try and not make this an annual thing? Well, as I said, I've been around in my current year for 20 years and volatility is a global phenomena. It's not something that we can fix neither in the UK, Scandinavia or wherever we are. It's simply farmers reacting to good prices. The prices were great, I have to say. The earnings on farms were great in 2025. And of course, the farmers, also because they had a great harvest, in most cases in all over Europe, produced a lot. And at the moment, they're producing slightly a bit too much.

26:11And then the market spills over and reacts with lower prices. It will correct itself. That's how the market always functions. Peter Tubor there, the chief executive of the Milk Coop, Dairy Coop, Arla. I know a lot of you listening this morning as well are also farmers yourselves. Let us know what you think, 85058, to what you heard there.

26:49of honest, unfiltered advice we usually reserve for top executives. Maybe you have a co-worker with boundary issues, or you want to know how to inspire and motivate your team. No problem is too big or too small. Give us a call and we'll help you solve the problems you're stuck on. Find Fixable wherever you listen to podcasts.