Will you be my Valent-AI-ne?

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1:00We'll have the latest with our suite of experts throughout the morning's programme. We'll also be taking a look at yesterday's announcements of slightly soggy economic growth at the end of 2025 and hearing about a surprise deal for one of the City of London's oldest and most prestigious names. And later, as a nation on the hunt for a bargain, how do supermarkets try to win our hearts? We'll be getting the inside story on the Valentine's meal deal from a former supermarket buyer. Wake Up To Money from BBC Radio 5 Live.

1:58Good morning. Thanks for having me again. And we also have Jane Sydenham, who's Senior Investment Director at Rathbones. Morning, Jane. Good morning. And last but by no means least, Frances Hark, Chief Economist at Santander. Morning, Frances. Good morning. Now, it is Friday the 13th, and if you're superstitious, that may be a worry. I'd like to know if you've ever made business decisions based on superstitions. Would you seal a deal on Friday the 13th or wait till the following Monday? Would you take out a loan, buy a house perhaps? Are there other things you might do to get a little bit of extra good luck?

2:37You can get in touch with us on text 85058, on WhatsApp that's 08085 909693 and if you're on social media use the hashtag WakeUpToMoney. We'd love to hear what you have to say. Anyway, Jesper, let's start with you. And you're on a live radio programme on a Friday morning. I'm guessing you're not that superstitious. I can't say I am. No, not really. I don't think I'll shy away from making decisions today or on any other day, quite frankly. But maybe a little bit of good luck. Maybe I should go buy a lottery ticket. I don't know. I'm not sure I'd be buying a lottery ticket today. I don't consider myself superstitious, but there are limits.

3:20Jane, what kind of investment patterns do you see on days like today? Is there an impact where people decide to hedge their bets a little bit? Oh, I haven't studied that much, actually. That's a tricky one. No, I mean, I don't think so. Not that I'm aware of. I think, you know, the broader global issues just kind of override it all. But, you know, maybe we do need to watch out. We'll have to be careful. Well, you're the economist, Frances. What do you think? I like that. As far as I'm aware, there isn't. But you never know. Maybe some people just put off decisions till the afternoon. I don't know.

4:02I think maybe there's a little bit of hedging. Wait till the afternoon. Wait till Monday. Anyway, let's have our look back at what's been happening this week. It has been a busy week, as I mentioned. And yesterday we got our first official look at how the UK economy fared across the whole of 2025. Now, the year did end with a slightly downbeat note. Growth of just 0.1 % in the final three months of last year, according to the Office for National Statistics. That was less than had been expected. And it was, of course, a period which included that very late budget at the end of November. May have upset confidence a little bit, some uncertainty there.

4:38Across the year, though, 2025, growth was 1.3%, a bit higher than in 2024. And speaking just after the figures were released, Chancellor Rachel Reeves seemed kind of optimistic. stick. We can't turn things around overnight, but we have created the conditions now for the economy to grow. And it is doing just that. I'm confident that the decisions that we have made to return stability to the economy, to bring investment to our economy and the changes we're making around planning and regulation will help deliver stronger growth this year, building on the economic growth that we have seen in 2025.

5:20Chancellor Rachel Reeves there, well, everything seems to depend on confidence. Jesper, you're a businessman, you're on the front line. What have you been seeing? We're seeing businesses definitely having some difficulty making decisions or sitting on the fence, looking at getting more certainty at the end of 2025. The budget was absolutely a good reason for people just to sit back. And they are sort of in dire need of stability to drive that confidence, to get sort of a clear plan. That will spark confidence. There will be less surprises hopefully coming through. As a result of that, they'll be ready to make decisions.

6:02And we saw that right after the autumn budget or winter budget. It was almost, and we've seen this sort of again this year. But people are still looking for flexibility. they are they're being burdened with with cost and that cost is is is driving low growth and we can clearly see that in the numbers coming through so that timing of the budget not knowing what to expect not knowing what the costs would be that was kind of key for you was it it was key for the clients and the prospects that we work with and i think it was it was key for most people around the business community. Why would you sort of invest if you don't know what the plan is?

6:43And getting that clarity, therefore, less surprises is incredibly important, I think, to anybody who's looking to invest. Francis Hark, I want to bring you in here because when we looked at the figures for the last three months of the year, the services sector, it showed no growth at all. And that's traditionally one of the engines of the UK economy, isn't it? It certainly is. I mean, I would say that the December numbers, because they were also published at the same time, did have some growth for services and less so for sort of manufacturing and construction. Unfortunately, has had a horrible time over the last few months.

7:22I suppose what's really interesting, if we look at the quarterly numbers and we look at the numbers across the entire year. I mean, just to focus a little bit, first of all, on the business investment, it has been very up and down. I suspect that that is to do with things like, well, you're quite right. It pretty much was the winter budget, which hasn't helped. I mean, I would say with business investment, obviously, times have been very volatile since, what was it? Covid is almost six years ago now. It feels like yesterday, but it was six years ago. And there's been a business investment has been affected by the fact that there has been a lot of chop and change over those years.

8:04The other thing that perhaps is more worrying, certainly from my perspective, is weakness in the household sector. So households haven't been spending anywhere like what we would have expected, say, in pre-pandemic times. And you can see that in the in the stats. I mean, just just to give you one, I looked back in 2018, household spending made up about 62 percent of GDP, which is about, you know, on average that that's what we would expect to see. Whereas this year, well, sorry, I should say 2025, it made up just over sort of 58%. Now, I know they don't sound like massive differences in numbers, but they do actually make a massive difference in terms of totality.

8:51So it just goes to show we need to invoke some animal spirits, I think, and get people spending again. So for you, it's a lack of confidence. I think that is part of the problem. I mean, you know, to invest, you know, as we've heard, you need to have certainty. You need to have stability. You need to know, you know, where it where government's going on policy. Chopping and changing does not help. And that actually is the same for, you know, households, too. They need to know where they're going. You know, what's happening with taxes? What am I going to be left with at the end of the day? You know, these are important for both households and businesses to actually decide, you know, what they want to either buy or invest in.

9:30And a moment ago, Frances, you mentioned the construction sector. I mean, it shrank 2.1 percent in the last quarter of the year. That's its worst performance in four years. What's going on? Yeah. Well, I mean, there's various things. obviously weather plays a large factor in construction which probably hasn't helped and perhaps won't help in January given how you know wet it's been. I'm sure we're all looking forward to maybe spring and summer but also I mean that there are issues I mean there are issues over things like skills and you know having the right people around so that they can and obviously there's been a lot of talk about that in terms of employment and how costly it is.

10:15And interestingly, I was talking to someone who was suggesting that, you know, a lot more people are moving to sort of self-employment in the construction sector, trying to, you know, overcome some of the additional costs that obviously have been in place since the 2024 budget. You mentioned the weather there. I mean, everything in Britain seems to come down to the weather at the end of the day, doesn't it? It's another shocking day. Well, it is our favourite topic of conversation, let's face it. Jane, I'd like to bring you in now, Jane Sydenham. How did the markets react to these growth figures?

10:48Yeah, it's interesting. I mean, there wasn't a great deal of reaction, really, because it's obviously very backward looking at this point. But I think what is interesting to pick up on that point about confidence. Last year was a really interesting year overall, And it shows that often stock markets can behave very, very differently from the economy. So although the economy was fairly flat, actually stock markets, and particularly the UK stock market, had a fantastic year. And that was really more to do with the fact that it was viewed as being, you know, although the UK is viewed as being a relatively slow growth economy, investors got to a point where they'd had fantastic returns from the US stock market and technology in particular.

11:34And then they looked at the UK and thought, well, you know, there's some good value here. And we've got a government that's got a reasonable majority. And so actually we saw amazing returns. But it never felt like it. Everyone feels very downbeat and lacking in confidence and so on. And partly it's the constant change. It's the constant headlines. It's the really bad weather, as we've spoken about recently. But, you know, it does make, it's really interesting that perceptions were really bad and yet the stock market actually did pretty well. Well, that's an upbeat moment to end on on that topic.

12:11But talking of growth, one interesting case study is Greater Manchester. And figures from last year showed the wider Greater Manchester region grew at more than double the rate the rest of the country has seen over the past decade. Earlier this week, we were looking at this on Five Live Wake Up to Money and Sean spoke to a few bosses who've seen their businesses grow quickly. They were Lawrence Newman. He's the founder and chief executive of the maker of those LED face masks, Beauty Tech Group, which listed on the London Stock Exchange last year. He was also talking to Sean Morton, chief executive of another listed company, the online travel agent on the beach, and Emma Thackeray, the co-founder of the soft drinks company Hip Pop, which sells in supermarkets throughout the UK.

12:55This is what they had to say. Just last week we received some financial support from the Combined Authority, a loan from their, I think it's the GM Advance Fund that's going to help our innovation and manufacturing capability under the arches in Manchester Piccadilly. And what that is going to do is going to help us progress a lot faster with a piece of ingredient and manufacturing innovation than we would have been able to do if we didn't have the money. So I think that's a really good example of how, as a local government, I guess, Manchester is investing in businesses and supporting businesses.

13:32Interesting. When, Lawrence, you talk about being listed on a stock market, was it last year that you listed on the list? Yeah, late last year. How does that compare to what you have in Manchester? Well, it's interesting to listen to Emma talk about support. I think when I look at my journey and I started the business back in 2009, I don't think there was too much support. So it's good to hear that there's, you know, there's upcoming help for maybe newer businesses. And actually, we struggled to raise capital in the early days. I think everybody talked about growth. But what I learned was really they wanted profitability quite early on, which is very, very challenging for startup businesses.

14:12When you say they? Institutions and anywhere where you're looking to raise capital. before I came on the programme today, I thought back to those days and was it beneficial that we were northern when I went to see northern funds? And I always thought, well, we're based in the north. You should be investing in us. But really, I think they look beyond, always look beyond that and look at the business itself and whether it's got an opportunity because there's always a high risk profile for a startup. So I think it's good to hear that you're receiving the sort of support that I think businesses in the northwest should receive from local institutions.

14:47Sean, why might that be? We talk about many of the positive aspects of Manchester's growth, but it sort of feels like there isn't that large investment scene or as big as it needs to be for the likes of yourself and Lawrence. There's still quite a big draw into London for these big institutions and they do want to meet the people at the top of the corporate they're investing in face-to-face and they want to do that regularly. So, I mean, fortunately, the transport down there is pretty straightforward going back and forth. Would it make a difference if there was, I don't even know what this would look like, but when you go to London and you're then in this sort of infrastructure of financial support and investment, it's there.

15:31Yeah. What isn't here in Manchester? Just think that the institutions that are deploying this capital into the stock exchange, they are in London. but I don't think that's a barrier for businesses based in Manchester accessing that capital at all. Yeah, and I think we're talking about listed life which might be different to a route that another business may go down. So you look at private equity, you look at raising money with high net worths, I think there is opportunities in Manchester for that and I probably should have said in my early days we ended up raising money with NVM which is a northern-based VCT fund.

16:08When we listed, I remember lots of the northwest-based funds saying, oh, I wish I'd backed you now looking at it, of course, because it's been hugely successful. And they came in high risk at the time and have done incredibly well being part of the journey. So we were backed eventually in the early days by a Northern fund. So the opportunities are there. I just think that they should be a little bit more aggressively looking at specifically backing Manchester-based businesses. So that was Sean speaking to Lawrence Newman, Sean Morton and Emma Thackeray earlier on in the week, and you can hear more of that conversation on Wake Up To Money on BBC Sounds.

16:47But I want to go back to you now, Jesper. You're headquartered in Wrexham, not too far from Greater Manchester. What have you seen? Funds coming into the region? Listen, there's a great vibe in Manchester. It's clearly become this major hub for tech, for media, for professional businesses outside of London. And I remember running a business up in Manchester in the early 2010s. And coming back, I was actually in Manchester on Monday where we used lawyers and bankers and the like. And one of the things that's sort of being challenged is setting out from Wrexham in the morning and getting to Manchester took me more than two hours.

17:29So one thing is the great sort of pool that is in Manchester and all the great stuff that's there. The other is just the regional challenges around the infrastructure, be it transport. I mean, I got on the train and getting first from Wrexham to Chester and then Chester to Manchester is hard. It's hard to have any mobile phone signal on the train. So all of those things need to be thought about. And as we sort of look at talent and getting people from, say, a Manchester to a Wrexham, that's really hard. That's it. The whole region is powering and clearly Waxham is too. And we've had lots of great things happening in that city too.

18:08And people are now wanting to live and build their lives in Waxham too. So the drive is there, the money's coming into the region, but the infrastructure really needs improvement. I think that would absolutely help. It makes it a lot more easier for people to sort of be together. That close proximity of people being together, spurring, thinking, capturing opportunities, solving problems is incredibly important. And if it takes me two and it's more than two hours to get from Wrexham to Manchester, that makes that more difficult. So, yeah, more energy, more optimism. Jane made the point of sort of the downbeat feeling vibe is around the country at the moment.

18:51Let's break that. And you definitely see that in Manchester. There's a great vibe at the moment. Francis, I'd like to bring you in here because this idea that the regional growth areas which have potential, but infrastructure holding them back, is this something that we're seeing across the country? I think it is something that's certainly outside of London. You do see this. I mean, we talk to talk about transport. Getting to London is relatively straightforward. Going across the UK, so going up and down the UK, relatively straightforward. But going across the UK is actually quite difficult, whether that's, you know, from, say, York to Manchester or, you know, well, Wrexham up to Manchester seems to be quite difficult as well.

19:36So, you know, there is there is this point and mobility is really important. And to be fair, the government have said this. This is why they're focusing on housing, because, again, you know, it comes back to this this infrastructure point. You need you need houses in the right places. You need skilled people to be able to move around depending on where those jobs are. Otherwise, you get into that sort of chicken and egg situation where, you know, you want to build your business in Manchester, but there aren't the skilled people there. but skilled people won't move there until the business is open.

20:08And you need to be able to get around that. So you need to have in place the ability for people to move as well. And obviously infrastructure is one of them. I mean, communications, there are still an awful lot of black spots around the UK. There are even some in London. So things like that really ought to be fixed. and doing so will mean that, you know, people can be more productive as well. So you never know, we might be able to increase that productivity rate that's so low. Yeah, because we're always hearing about the major infrastructure projects, the HS2s, the Northern Powerhouse rails, things like that.

20:46But it sounds from what you're saying as though it's literally the bricks and mortar, building houses, making sure that the internet works that we should be focusing on. Yeah, I mean, certainly, don't get me wrong, I mean, the the the you know, what they're doing with things like, you know, Northern Rail and all the rest of it is very important to be able to to move around. But equally, if you can't communicate either, I mean, at least you could sit on a train, even if it took, you know, an hour longer. If you're able then to actually use the Internet, you know, the one thing that Covid brought us was the ability to actually, you know, communicate much, much more without having to necessarily be right next to somebody.

21:24But you can't do that if your Internet's not working. So, you know, those sorts of things are really important to be able to drive productivity, mobility, etc. Jane, obviously, one of the things that companies really, really need when they're setting up is the ability to attract funding. Companies in London, that's not generally a problem. London's awash with money. What about companies out in the regions? I don't I think if it's you know the business case is good they do attract money I mean I'd kind of go back on on your comment about funding for for businesses I think you know we're good at this country's brilliant at innovation absolutely fantastic at it but it's the the support later on for businesses to kind of grow and get those second third fourth round of funding and that's less good sort of across the system, actually, not necessarily related to geography.

22:24I think, you know, good businesses, wherever they are, will attract funding. I think that generally, the system to raise funding is good in parts and works well. There's just not quite enough of it across the whole economy. And Jesper, we're hearing a lot about Greater Manchester, obviously, other regions count as well. Wrexham's had quite a lot of inward investment too. And obviously, there's been all this focus on Hollywood A-listers and the football club. Have you felt that that's been drawing attention in? Oh, 100%. I mean, that's all there is in Wrexham, full of Hollywood people and footballers.

23:03Now, joking aside, absolutely. And we see that as we speak to businesses. And previously, we used to say, oh, where are you? Oh, we're in Wrexham. Well, where on earth is that? And now people exactly know what it is, and it's a conversation startup, both here in the UK, but also in our business in the US. When you sort of talk about Wrexham, they're like, oh yeah, I know where that is. Let's talk about the football. You sort of have a good conversation. And being called Moneypenny is a fun sort of little quirky thing as well. And people go, oh, what's the thing about that? So what I'm saying is that that point that inward investment in different regions is positive.

23:43Absolutely. When you see Wrexham today, many times getting people to move to an area requires it to be attractive, i.e. being cafes, restaurants, shops, all that sort of thing. Wrexham sort of shortcut that because there's so many tourists that demand those businesses for them to think that's interesting. They need somewhere to eat. They need somewhere to stay. This sort of thing. Now people are coming to Wrexham and it's really positive. It's remarkable how much energy there really is in the city right now. Have to visit Wrexham. That's the instruction there. Yeah. Now, in case you hadn't noticed, it's been a whirlwind week for Prime Minister Sir Keir Starmer.

24:26We came into it hearing about the departure of Morgan McSweeney, his chief of staff. Then his communications director, Tim Allen, went out the door. And just yesterday, news broke that his cabinet secretary and head of the civil service, Chris Wormald has been forced out. He'd only been appointed in December 2024, meaning his departure makes him the shortest serving cabinet secretary since that role was invented. Of course, that was all accompanied by ample speculation on the prime minister's own job. This was the Scottish Labour leader Anasawa on Monday. The situation in Downing Street is not good enough.

25:02There have been too many mistakes. They promised they were going to be different, but too much has happened. Have there been good things? Of course there have, many of them, but no one knows them and no one can hear them because they're being drowned out. That's why it cannot continue. But what does all of this noise, political noise, mean for businesses and how did the markets react? Well, Jane, we hear it time and time again. It's the old trope that markets hate uncertainty. But I mean, some people also profit from uncertainty. What have we seen this week? So we've had a bit of weakness, initial weakness in sterling.

25:44I mean, not a great deal, but a little bit. And of course, the worry is, even though we have, as far as international investors are concerned, the UK has a government with a reasonable majority. And so there's a sense of stability. But of course, that hasn't helped sterling this week. And the perception that, you know, if there is a change, one of the concerns that we have is that the UK relies on international investors for its funding. So any instability in government can affect the perceptions of the UK from the outside. So it's all about confidence, isn't it? We were talking about that earlier.

26:26Francis, what do you think? you're absolutely right it is about confidence um you know markets households businesses we we all want it um and and so when it when it's not there you know it does create create issues um i mean it it's difficult because obviously you're these are things that you know personally you can't really affect so you're sort of watching and waiting to see what happens and it comes back to this point, well, if you're watching and waiting, are businesses going to invest? And, you know, so we really do want to see that sort of much more stability, you know, in what we're saying from government anyway, in terms of, you know, policy outcomes.