EPISODE TRANSCRIPT.
Felicity:
Now with me this morning through the whole show is Caroline Casey founder of the Valuable 500, a global business partnership of 500 companies and their CEOs working to end disability exclusion. they include L’Oreal ,Sky, Apple, many many others Caroline, Good morning.
Caroline:
Well, good morning. You’ve put me in a good mood. All the things this morning.
Felicity:
I am I am pretty pretty rested pretty ready for my earliest today and tomorrow. By next week I’ll be I’ll be the same old kind of like Good Morning Welcome to Wake Up to Money. I’m fascinated by what you do because you launched the Valuable 500 four years ago. How’s it going? What’s it achieving?
Caroline:
But can I just start by saying you know when you talked about what you you know your exams and did they lead you to where you’re going to be? Absolutely not. My exams had nothing to do with being the troublemaker that I am and the very proud Founder of the Valuable 500. Look, four years later. Where are we? I mean to have achieved creating something like this which is the world’s biggest partnership business partnership for any issue after the UN Global Compact, which I think is extraordinary, with the commitment of 500 CEOs and their business which is 22 million employees to attempt to systemically change business to equally include people with disabilities and their families. And where are we? We’re now at the point of getting our companies to deliver and to deliver collectively against three of the biggest problems that face people with disabilities in business, which is getting disabled talent into leadership positions, which is getting our companies to report on disability performance and to look at proper authentic representation in internal and external communications in companies because I’m not interested in solving symptom problems. We’ve collectively got to change the system and we got to do a quick and we’ve given ourselves a target. Can you believe this? But two years 2025 the third of December 2025 in Tokyo we’re holding the first accountability summit in the world. So how are we? We’re good.
Felicity:
I’m enjoying I’m enjoying hearing how kind of data specific what you’re doing is you’re looking at measurable outcomes. You’re not just sort of talking to companies and wouldn’t it be nice if more was done. You’re you’re setting targets you’re setting goals and you’re setting dates.
Caroline:
Yeah, because if we don’t have goals, targets and dates, nothing gets done. I look honestly one of the biggest problems around progress and I mean real progress is a lack of accountability. Accountability comes from measuring. We have to have, we have to have targets in our Footsie 100 companies. We did a piece of research with tortoise three or four years ago, there was not one company that was reporting on disability performance and activity, like in the Footsie 100 companies. So if we don’t report and I don’t care how bad the reporting is or how bad the figures are, but just report so we can start setting targets and measure and manage. The days of making the case for disability and business are over and particularly we’re talking about inflation, and we’re talking about the need for growth, we’re talking about this is 20% of our global population with the mother and father. It’s 54%. In the UK alone that has spending power of 249 billion. What are we talking about here? 10.2 million people that we’re leaving on the sidelines, when at this point, we need everybody to contribute and everyone’s gonna have the same chance.
Felicity:
Your enthusiasm is infectious and incredible as somebody else who’s probably quite enthusiastic Despite the early hours Russ mould investment director at AJ Bell Ross Good morning.
Russ:
Welcome back.
Felicity:
Thank you very much. I got to say all the front pages this morning they feel quite five live somehow it’s all football and analysis of those inflation numbers. I’m particularly enjoying the sun’s headline, Lion yeses. Russ Did you did you watch?
Russ:
I was in the office. It was only in the corner of the office. But where my desk is I actually couldn’t see the screen but I could see my but I could see my colleagues bobbing up and down. So I knew that there was something happening. I knew Wellington had gone from and then when they when they got the final third girl that was pretty easy to spot. So everyone’s hopping up and down. So
Felicity:
I was trying to watch it on a train and I couldn’t stream it and so I was just sort of frantically refreshing social media to try and find out what was happening. Caroline, I know you’re Irish. Was there any part of you cheering the lionesses on?
Caroline:
Oh, listen, I’m cheering that lionesses on this is about female, sports and the visibility of it. It’s fantastic and doesn’t matter what team of course congratulations England. It’s phenomenal!
Felicity:
Thank you. Congratulations.
Caroline:
I’m so excited! This This feels like a year of women doesn’t it? I mean, if you look a Barbie like content breaking box off, and they have the renascence tour of Beyonce, and then you have you know, Taylor Swift and then you’ve got female football. It’s fantastic. It’s really exciting. So yeah, I’m thrilled!
Felicity:
It was very, very exciting. And this weekend, it’ll be even more exciting, and we’ll be talking about that. And what that means in a business context later on in the show. On A level results. Nikki’s been in touch to say I didn’t fare well but managed to find a great course in clearing at my uni of choice. It all worked out in the end. Nikki that is the inspiration we want to hear this morning. Do get in touch with your stories 85058. If you want to share, let’s talk about inflation. It is undeniably good news that the number fell in the 12 months to July we find out found out yesterday. It was down to 6.8% from 7.9% in the 12 months to June, but but it was a bit of a mixed bag once you go inside the numbers and shook them around a bit. So the overall number was skewed by energy prices falling due to off gems energy price cap some of the other underlying price pressures failed to fall. Well joining me to shake those numbers up even more is Chris Hare, senior economist at HSBC, Chris Good morning.
Chris:
Morning.
Felicity:
Thank you first off then the headline figure. We expected a fall didn’t we? Was that in line with what you were expecting?
Chris:
Well it was basically point one percentage point above what economists like me were expecting so it was pretty close, but not quite as much for fall as we would have liked. And as you mentioned, you know, it was good news. We have lower utility bills. We have a softening in food price inflation, that’s great. But in terms of stripping out those those effects, looking at underlying inflation, well, it’s still uncomfortably strong. We’re still at close to 7%. So uncomfortable for a lot of households. It’s uncomfortable for the Bank of England, so still a very long way to go.
Felicity:
And there’ll be people listening just like just take the good economic news. It’s been bleeding for a long time. But no you we do have to analyse exactly what’s going on with the numbers. What led to the drop, we did see? How much of it is just down to those electricity and gas prices falling because of that lower energy cap?
Chris:
Well, in terms of the numbers, the inflation rate fell by more than a percent. And about 70% of that decline was driven by the drop in utility bills and another 25 to 30% of that decline was driven by a softening in food price inflation and actually some better news here is on food prices. Not only is the rate of price growth in food, generally easing up, actually some prices for some food items, things like flour are actually falling. So there is some of the better news, even though a lot of it is driven by those volatile components, you know, in terms of where it actually matters for households. Well, some households might feel a little bit of a benefit from things looking at least a little bit less bad in terms of the intensity of the cost of living squeezed that we saw through the winter.
Felicity:
A little bit less bad. Well, we’ll take that and we should always always make the point shouldn’t we? That falling inflation doesn’t mean prices necessarily start to fall they give some might, but it doesn’t mean prices are falling. It just means they’re rising. Not as quickly as before. You talked about food there, high food prices. Yes, some of them have eased, but core items like milk, bread, cereal, falling in price. Some price rises, though hitting me particularly where it hurts. Data from which earlier this week showing that for example, Mr. Kipling’s six chocolate cake slices have soared from one pound 16 to two pounds 66. That’s an increase of 129%. And that shows doesn’t it that some items are just still seeing staggeringly high growth.
Chris:
Yes, it was particularly with the food and also across the whole inflation basket are seeing quite a lot of price growth. And what’s going on here is that even though wholesale food prices on global markets have fallen back in a lot of areas. There are still a lot of cost pressures running through the supply chain. So if we think about wage growth for example, you know, we saw in data earlier this week, underlying wage growth on a year on year basis is rising, and it’s up at near 8% year on year. And that applies to a whole range of sectors through the economy. So even though some costs of businesses falling, those labour cost growth rates are still at very high rates. And those wage pressures are feeding through into business costs. They’re feeding ultimately into the price of a lot of items in the inflation basket and that’s what’s keeping those underlying inflation pressures high.
Felicity:
Chris, I want to bring in the Caroline Casey, founder of the Valuable 500. Caroline, when we’re talking about wage inflation, what people are kind of expecting what they’re demanding to just allow them to cope with the excuse me the high inflation numbers that we’ve been seeing over the last 18 months. What was that doing in terms of the businesses that you work with? Does it does it move them away from being as focused on the good work that they’re doing with you?
Caroline:
That’s a great question. By the way, HSBC. Hi, Chris. You’re one of our Valuable 500s very proudly.
Felicity:
I’m loving this morning, I’m enjoying it!
Caroline:
It’s positive because not everything is positive and easy. Listen, there’s no doubt and Chris referred to it. The cost of wages to business and any, any cost issues or crisis that exists in the world, have in the past meant that issues around diversity, equity, inclusion or disability. They’re the first things to go, right? They’re the first things that there’s sort of the passionate or the discretionary passion of people but I do think things are changing. You asked me as we began, have things changed? We are seeing that the system change in business is that diversity, equity inclusion and disability is starting to be embedded fully and strategically and not be something that’s just a passion project. Because there is a recognition of the growth that comes with diverse employment, because it does diverse consumers, but it is always a threat for us. So when inflation is high, we have to make a harder case for businesses to maintain and to build on the programmes rather than just drop them because costs are going up. Yes it is always a tough time for us.
Felicity:
Very, very interesting, Chris, let’s talk about the different kinds of inflation so that the figures showed that core inflation remained unchanged at 6.9%. Can you explain what core inflation means? And why that seem a bit stuck?
Chris:
So core inflation is essentially overall inflation but it’s after we strip out the effect of energy prices. So that’s your utility bills also includes motor fuel prices, and we also strip out food price inflation. And because those items like food and energy can be very volatile, then you often want to strip those out in terms of trying to think about where inflation may eventually end up once those kind of near term shocks drop out of out of the system. So 6.9% core inflation that is clearly very high. And a really big driver of that is sort of as I touched on, is wage growth if you’ve got wage growth of around 8% you know, that’s, you know, unless companies are taking those wage costs on the chin or taking a big squeeze on their margins, then ultimately, they are going to be raising prices in response of that to that and that’s what we’re seeing right now. I mean, typically, when we, thinking about the Bank of England, trying to meet its 2% inflation target typically would think about wage growth in the region of three no more than 4% to be consistent with that. And clearly, we’re still a long way above that. Hence why we’ve got those broad based underlying inflation pressures that’s keeping that core rate pretty uncomfortably high.
Felicity:
And you talked about the Bank of England, I mean, it’s pretty uncomfortable for them, isn’t it that target of 2%. We’ve been so far from that for so long with inflation. Even though it fell yesterday in the in the 12 months to July, we found out yesterday, we are expecting it’s pretty widely expected that there’s going to be more pressure to increase rates for the 15th consecutive time in September when the Monetary Policy Committee meets and makes that decision.
Chris:
Yeah, that’s right. I think staff at Bank of England reporting it patting themselves on the back because in terms of the number yesterday, it was actually bang on the bank’s latest forecast. But the slight issue is that, you know, earlier this week, as I mentioned, we had that really strong wage prints and that came out stronger than expected. And I think that’s kind of ramped up expectations, understandably, that we can see another rate rise from the bank in terms of our forecast, we reckon there’ll be another 25 basis point bank rate increase, that’ll take bank rate to five and a half percent. But I think the point that we often really try to hammer home is that, you know, you could quibble about exactly where interest rates are going to get to in terms of the peak. One thing we really think quite strongly is that once you get to that peak rates are probably going to stay at high levels for an extended period of time. Because it’s going to take quite some time for inflation to come back down.
Felicity:
Chris Hare, senior economist at HSBC, thank you for making that all very clear. Very early in the morning. Thanks for joining us. Listening to that is of course, Russ mould, Russ. It’s often said that it takes time for changes to interest rates to actually feed into the economy to have that impact, because, for example, so many people are on fixed rate mortgages. It’s been a long time, you know, it’s been well over a year now of interest rate rises. Is there a risk if the Bank of England does hike rates in September, that it’s actually going to overshoot that a lot of the work has already been done, the pain has already happened, and that the economy inflation is starting to come back under control?
Russ:
Yeah, they’ve been raising rates for 18 months now. And you have seen some members of the Monetary Policy Committee descend and argue that they’ve probably done enough. I guess it’s tricky because monetary policy is a blunt instrument. You know, we’ve looked you look at the UK household market of 24, 25 million households in the UK, a third are funded by mortgages, third are actually already owned, and then a third of people rent. So in some ways, you’re putting the squeeze on only 1/3 of the population. So it is in that respect, a very, very blunt tool. And I think the danger that the Bank of England faces is one it made a hash of its call that inflation would be transitory. So human nature being what it is, is, has a tendency to overcompensate on the other side. And secondly, and secondly, they’re, they’re trying to set this policy for where inflation is going to be in two years time. So there’s a large element of necromancy to it, what the trap that they the trap that they must and fall into is be caught. And they use this phrase a lot: ‘Data dependent’, because that means they’re using data that’s already been and gone. And what they’re trying to do we set policy where it’s going to be in 12 to 24 months, because that’s how long it takes to have effect and that’s the really, really hard bit.
Felicity:
Yes, it of course, with inflation. We’re always looking out of the back window. We’re always looking at what has happened.
Russ:
Yeah to drive it. Yeah. And if you drive a car looking in the rearview mirror, where you have your window, what’s going to happen eventually?
Felicity:
All the more reason why I’m very glad that I don’t have to make these decisions, Russ, thanks. Drink some tea sit tight. Lots more to talk about
Felicity:
Suit in Portsmouth has been in touch with her A level University different career completely story she says Social Science at Dundee uni five years as a translator than 25 years in technology that is very, very varied. Keep your stories coming this morning. And let me know what you think about this because there has been a huge amount of focus on London’s Ultra Low Emission zone it’s going to be expanding later this month. And I was in London yesterday. Lots and lots of signs up warning drivers about the changes that were coming. But it’s not the only place in the country where charges have been put in place for driving polluting vehicles. So in the past few years, eight zones have sprung up across Britain. This is after the government told councils they had to get air pollution back under the legal limit. And our transport correspondent Katie Austin has been looking at the impact.
Katie:
If you drive around Britain, you’re increasingly likely to come across a clean air zone. That’s where older, more polluting vehicles attract a charge for driving in a designated area. The idea is to reduce pollution by pushing people towards less polluting vehicles. Bradford’s clean ozone came in last September after some delay. Professor Rosie McCracken is from the independent research group born in Bradford.
Rosie:
So Bradford, like many other big cities has very high levels of pollution. In fact, we have illegally high levels of pollution. And we know from research that pollution is one of the biggest causes of ill health.
Katie:
Is it possible to say whether it’s been a success or what it’s achieved so far?
Rosie:
So it’s still too early to tell. We need to wait until the clean air zone has been in place for at least a year to be able to look at the impact on air pollution, but also to be able to look at the impact on health in Bradford.
Katie:
Bradford City Council says most local taxis that least 70% of vans now meet the emission standards. But the zone is proving a challenge for some businesses.
Unknown speaker:
So basically, if you were to leave this yard, go into the lights turn right within 50 yards here in the clean air zone.
Katie:
That’s Paul Robson from ATV direct which takes goods all around the country in vans or lorries, grants to replace non compliant vehicles wouldn’t have covered their costs. So now a lot of planning goes on into which vehicle can be sent where it’s not always straightforward.
Paul:
We had an incident last week where one of our drivers just wandered into the Sheffield clean air zone. He wasn’t aware the signage was poor, and he ended up getting a fine for that.
Katie:
120 miles away in Birmingham, a clean air zone has now been in place for more than two years. I’m in ladywood in Birmingham and just to my right is the busy dual carriageway that tells us we’re at the boundary of the clean air zone and just to my left is one of the big signs that tells drivers that going down this road means they’re entering the zone. Speaking to locals by a small parade of shops, I got a sense of how opinion remains divided.
Unknow speaker:
A lot of people live here, okay. Especially kids, so at least those cars which makes a lot of pollution, I think we should consider in a direction of banning them.
Unknown speaker:
I would have to pay if I wasn’t disabled and as for the clean air zone, no, that won’t work because the people that round here won’t be able to afford other cars.
Unknown speaker:
To my shop, first question they asked me: “Are you in the zone or out testing Zone?” So once you say I’m inside the charging zone, they’re going to add 8 pounds for your delivery.
Katie:
Other businesses to have noticed an impact. Karen Williams from the Federation of small businesses in the West Midlands. Hi Karen!
Karen:
Hi. If people are aware that there is a cause in place, and they they ordinarily have gone into that area for whatever reason, whether it’s to do business, whether it’s to visit whether it’s to move goods or services around and they may well be thinking again, the businesses in the comfort zone itself are seeing an impact.
Katie:
Birmingham City Council told us since the zone had been introduced, the percentage of the most polluting vehicles coming in had more than halved to 6.4%. Scotland has taken a different approach. If you take a vehicle which doesn’t meet emission standards into Glasgow’s low emission zone, you’ll get a fine of at least 60 pounds. Not all cities in England which considered clean air zones have gone through with them. Plans to introduce one in Manchester are on hold amid growing discussion of the best way to clean up the air without hitting people too hard in the wallet.
Felicity:
And that was our transport correspondent Katie Austin looking at that issue and listening to that is Caroline. Caroline. It’s a really difficult issue isn’t because you can hear the business voice concern but then obviously, there are huge concerns for people walking, cycling using the streets in a more pedestrian way and potentially breathing in polluted air.
Caroline:
I mean listening to that package, that is the complexity of the issue because we’re gonna we are gonna have to tackle it. I think research says that the UN are saying that by 2050 the two thirds of our population are going to be in cities. So like this is something we do have to deal with but then you can hear the effects that it’s having on older people, people disabilities, business, I mean, look if we are going to clean up here and I think it’s Manchester that was at the end of the package, how can we do this? Because there’s no point is putting higher taxes of our costs on people driving cars if our transportation system does not work efficiently and effectively right? So you can’t take something away or put a cost on if we can’t enable and allow people to move around. My biggest concern is actually about transportation systems, public transportation system that is fully inclusive for everyone so that we actually can have a clean airzone but people can be able to move around and business can also be allowed to function. And I hate this thing, isn’t it? There’s this constant tension or competition between planet and people. How can we not design something that’s inclusive for human beings, as well as good for our planet? And that this transition period is incredibly difficult. It’s x and PAC is just to see all those different pulls on it and how we do this and how we do it well, but as far as I can see and understand, we have to be looking at public transport and having every lived experience as part of the design of that public transportation system right? So that we can do it an inclusive and a green way.
Felicity:
I think our listeners some of our listeners are agreeing with you. Keith has been in touch on Twitter X. Keith has been in touch on X to say regarding Ulez it’s a very good idea but the public needs to be brought on board with more compensation and public transport at the moment the amount offered is not very good at all. Keep your thoughts coming on that. Keep your thoughts coming on this as well because the cost of renting a home in the UK is rising at its fastest rate since records began. Records admittedly only began in 2016. But it shows it’s still pretty fast. Average rents went up by 5.3% in the year to July. Russ is this as simple as demand is outstripping supply?
Russ:
A lot of economics ultimately comes down to them. Yeah, capitalism, rewards, scarcity, and it punishes abundance. And the problem that we have is that with sunny for noon, we’ve just discussed how many people have locked into low interest rate mortgages. So that’s giving them some breathing space brief looking to get on the ladder now and take out say your first mortgage, you walk into a much higher number. That means that again, a lot of property can be unaffordable for people house prices are up 75% since Help to Buy was introduced in 2013. Wages are around a third. So I do question with the Help to Buy actually ultimately helped to buy in the first place. But that aside, it means that other people can’t afford to buy so they’re having to rent so to perfectly summarise it at the start, supply is outstripping demand. I guess it has any good news, with inflation running at 6.8% and rents growing at 5.3%, at least it seems that maybe one or two landlords are cutting tenants some slack, at least.
Felicity:
Actually, I was thinking that, does that suggest that this isn’t as big as I’m sure for for renters. Individual renters will be screaming at their radios now. It doesn’t mean it’s a particularly big issue. Does it? Does it mean if it’s below inflation? Does it mean that it’s not as big an issue as it would be in a more normal inflationary environment?
Russ:
It is still clearly an issue if it’s your rent that’s going up by 5.3%. And your wages aren’t and if your wages are going up by eight and then at least that gives you a little bit of breathing space there. But it is still an issue and I guess the interesting thing there is if landlords mortgage costs they start to go up will they then put their rents up further down the road? So it’s definitely a trend that’s got to be watched extremely closely.
Felicity:
Something else that’s going up is insurance premiums.
Russ:
Tell me about it! My car, I was I was given double this week.
Felicity:
And I mean, Russ, can you, we’re all friends here. Can I ask had you been driving in a particularly terrible way for the last 12 months?
Russ:
No we only do six 7000 miles a year. So actually, we try not to use the thing at all. It’s always many ferrying sports teams around so we actually try not to do too much. So we won’t be paying that, by the way courtesy of price comparison sites. We’re already getting a much better offer than that, but there but there is still going to be an increase I would guess of a third, potentially. So insurance prices are going up. Yes. Particularly for cars. We saw that with Admiral yesterday. Is that were you going to ask?
Felicity:
I am going to ask you about Admiral because you’re certainly not alone, admirals interim results showed revenue of 1.6 1 billion pounds in the first half of 2023. That was 14% up on last year. Pre-tax profits of 233.9 million pounds. Aviva reported post tax profit of 377 million pounds and that’s a pretty significant increase from last year’s 198 million pound loss. The inflation figures show overall car insurance premiums, they’re up about 30 or 53.4% in July. Customers won’t be cheering these results will they?
Russ:
Shareholders might be I mean, interestingly, Admiral shares were up 7% yesterday, although they actually haven’t done anything over the last four or five years. And I think one of the issues that Admiral has been wrestling with is that it’s seen, it had an amazing year in 2020 when let’s face it, none of us were really allowed to drive and we still had to pay our insurance. But that is subsequently people have been out and about, a bit more accidents. And again, there’s been huge inflation in terms of the cost of repair. So they’ve been looking to compensate for that. You’ve probably seen some capacity come out of the market again. So that’s where capitalism was rewarding scarcity. Those who were still in the market can charge more because we also need to keep our cars tax and insurance on the road. So they are again responding to market forces. It’s interesting to hear their CEO say that I mean, their profits dipped very sharply last year because claims went up an awful lot quicker than premiums. It sounds as if that’s now starting to reverse. And also the UK businesses is now broadly flat so people are clearly shopping around car insurance wise and money and price comparison sites do help there, but their overseas business is going well and they’re branching into areas like travel and pets as well. So the company’s client base is up by a third over the last five years and the share price doesn’t move which looking at it purely from the narrow perspective of share price is potentially quite interesting.
Felicity:
It is very interesting. We’ve had a message from Peter on social media saying: “Your segment on interest rates, homes 1/3 owned 1/3 rented 1/3 mortgage and he wants to know would two thirds then be affected by interest rate rises as rental rates have gone up to cover increased investment mortgage rates. What’s your hunch?
Russ:
I think that’s a really good question I think possibly with a lag would be my answer because again, like like mortgage holders, landlords may have, you know, fixed prices, they may have, you know, buy to let mortgage deals. So I think if as those have to roll over and be refinanced, that’s when you could potentially see rents being increased to compensate depending upon the financial position of the landlord. They may you know, be very, very happy and financially able to help out their tenants make sure that the tenant continues to pay the rent and there’s there’s a long term relationship there. If somebody stretched themselves to the limit with a buyer to let mortgage and has got a portfolio that’s putting them their own cash flows under pressure. They may have to be or want to be a little bit less forgiving.
Felicity:
Russ thank you very much!
Felicity:
Good morning. If you’re just joining us welcome it to Wake Up To Money. It is just coming up to 5:37. There is a huge amount to talk about this morning and you are getting in touch on all of it. We’ve been chatting about car insurance, Joanne and Exmouth says it must be where you live Russ mould from AJ Bell. I think she’s talking to you. She says our car insurance only went up 10 pounds this year. And that includes our AC cover, shop around. Joanne that is the message. Isn’t it? But people are also getting in touch with their exam results stories what they did next, particularly if they didn’t get the results that they were hoping for or perhaps didn’t get onto the onto the course that they were hoping for get in touch, share your stories this morning. Especially if they’ve got a happy ending because hundreds of 1000s of young people across the country are getting their exam results today. For many it will mean finding out if they’ve got into their chosen university. Others might be heading for the clearing hotlines. Others will be planning to go straight into the world of work, a new research from LinkedIn has found there was a 90% increase in the share of UK job postings that did not require a degree last year. Let’s dig into that with Josh Graff, who’s LinkedIn managing director for Europe, the Middle East and Africa. Josh, good morning.
Josh:
Good morning.
Felicity:
Very good to have you with us. Explain what’s going on here. Does this mean that there is just an increase in jobs that don’t require much academic qualification at all? Or are we seeing something different? Are we seeing a shift in employer behaviour?
Josh:
We’re seeing a shift take place a lot of companies are now recognising the benefit of hiring on skills and potential versus just education and experience. And they’re seeing enormous benefits to this and enables them to broaden out the talent pool significantly. It helps improve diversity as well. And of course, as you mentioned before, that’s great for young people today who are getting their results who perhaps may be a little frustrated not to get the results that they worked for or that they’d hoped for. And to everyone who’s in that situation that I would say don’t be disheartened. There are plenty of brilliant career paths that people can pursue even if you don’t go to university.
Felicity:
So what kind of career paths, give us some examples of jobs you’re seeing where degrees aren’t required that might open up lots and lots of options and future doors for young people.
Josh:
But the great news here is that over the last 12 months, there have been hundreds of 1000s of roles that don’t require a university degree. And there are brilliant examples of this. For example, the likes of IBM, 80% of the jobs that IBM now don’t require a university degree. On top of that they have a great apprenticeship programme. The likes of Kellogg’s recently announced that they no longer mandate university degrees as well. So this is very much becoming the norm and I say this from experience of someone who almost 25 years ago dropped out of university and was excluded from the a lot of the jobs initially and even after 10 years of experience but today, it feels like a very different atmosphere. I think a lot of companies are very conscious that people may either not choose to go to university or simply they can’t go to university because of the financial burden.
Felicity:
Russ Mold, from AJ Bell, I know you’re quite involved in AJ bells apprenticeship scheme, I suppose you’d be you’d be echoing what we’re hearing from Josh.
Russ:
I think the scheme’s doubled in size this year. I’m actually coming up to Salford to see the the new intake in September when they when their course begins and what and lots of them that they either can’t afford to go to university don’t want to and just want to want to get on with it and make their way. What we say to them is when they when they come along to the speed dating and the early meetings, they’re all a bit nervous or don’t know anything about financial services. And the message the message that we give them is really simple. Like when I steal it from Zig Ziglar the American inspiration speakers say a lot. It’s your attitude, not your attitude that determines your altitude. And all of these these kids are they’re just young and they’re keen and they’re fantastic. To get on and they learn incredibly quickly. They’re a tremendous asset to the firm. And I’m sure it’s a programme that we’ll be we’ll be looking to develop so no no, no degree required there. I can assure you,
Felicity:
Josh, what about your academic background though? Perhaps you haven’t got the grades you want to go to university are those grades going to hold you back? Or other routes into satisfying careers even if perhaps you haven’t quite got where you wanted.
Josh:
There’s absolutely roots into satisfying careers. And I think it’s very easy to become despondent today. Certainly if you don’t get the results that you had worked for, that you’d hoped for. But one thing I would say to those students, don’t underestimate your existing skill set. If you’ve worked, done part time work in a bar or restaurant, for example, you would have probably developed great communication skills, great customer service skills. They’re in higher demand from employers today. So really reflect on the skills that you have. Think about the industries that you want to work in, go online, look at the many hundreds of 1000s of jobs that are open for people today without a university degree. And in some instances, there may be skill where you still need to do a little bit of work. So if you can identify those skills, there’s plenty of free online courses or courses in your local area to try and bridge the gap between the skills you have and some of the skills that companies are asking for.
Felicity:
I do know that some of some of my skills about staying calm in tough situations. They come from my time selling burgers at one of the one of the country’s leading a burger providers. What what wider trends Josh, are you seeing across LinkedIn? What’s that? What’s the jobs market looking for everybody? Like for everybody at the moment?
Josh:
Even though it’s softened a little little it is still a very tight labour market. There is a war for talent taking place at the moment. And don’t get me wrong salaries still is the most important factor for candidates. But one of the trends that we’ve seen over the last 12 months is this need for increased transparency, that’s transparency on salary bands, but also transparency on culture and on values, especially young people. They’re offering discounting working for a company, they’re saying no upfront if they don’t believe that company matches with their culture and their personal values and so therefore expecting companies to be very transparent around areas like sustainability, diversity, inclusion and belonging, learning and development, and they’re getting so pointed that they’re going in for interviews and not just asking about the company’s commitment to those areas, but the individual hiring manager, they’re asking what they have done to manifest the company’s culture and values during their time at the organisation.
Felicity:
What about I hear a lot from people real frustration that they look at job adverts, maybe on LinkedIn or maybe somewhere else? They’re really excited about the job, but the employer isn’t actually stating the salary. You talked about salary transparency there. What is it other any improvements in that because that’s obviously a pretty significant part of whether or not you go for a job.
Josh:
I think it’s slow but we are making progress over the last couple of years companies are increasingly publishing their salary bands, but there is still a long way to go until that’s consistent across all organisations.
Felicity:
Josh Graff managing director for Europe, the Middle East and Africa at LinkedIn. Thank you very much indeed for joining us this morning. Let’s move on to China. Now the downfall of one of the country’s biggest property developers there the potential downfall is threatening the world’s second largest economy. Country Garden is facing billions of dollars in losses and $200 billion in unpaid bills, and it’s feared that if it does collapse, it could ripple into financial markets and hit China’s GDP. I’m joined now by Louise Lu, a China economist at Oxford Economics based in Singapore Louise Good morning.
Louise:
Hi. Good mooring. Good to be on!
Felicity:
Good to have you. briefly explain what how significant Country Garden is because it’s absolutely massive but explain how significant it is and what’s going on with it.
Louise:
Yes, so Country Garden was I would say that it is actually one of the most geographically diverse companies by house projects in China. Most of his projects are sort of in your tier three tier four cities. So the lower tier, rural cities, and it’s actually it’s actually ranked first in terms of total sales in the country. So it is a big player in the property volatile space. Now, the problem is that because of the multi year deleveraging campaign that’s been happening in the property sector, much of the housing crunch has been happening in these lower tiered rural cities. And that’s where a country garden has gotten has perhaps the most exposure to crime that, again, is leading to a liquidity crunch at the moment.
Felicity:
And that’s what’s causing the the issues and how significant how likely is it and how significant would it be if we did see a collapse?
Louise:
Well, yeah, it’s interesting. You mentioned earlier the potential downfall I think that was the emphasis on potential. I think the significance of it is is really dependent on on what the government is going to do about it. I mean, on paper, theoretically, country gardens bank borrowings is is quite a small percentage of the total Chinese onshore banking systems loan book. So the systemic risk from that angle is probably not that big and probably quite manageable. But the fact that the government is quite silent on the issue is kind of spooking investors and really making them second guess the property sector as an investment destination as an investment choice. And I think that is what is perhaps most detrimental at a current moment.
Felicity:
It can be hard can’t it? To get to get the negative numbers out of like as real as I mean, the country has faced problems, though, specifically in its property market for a number of years.
Louise:
Exactly. I mean, I think I think the what has really shifted this year is that we’ve seen that the authorities are very clear that this will not be the year where they would actually, you know, turn to the property sector to engineer a upcycle. You know, they wouldn’t, they are quite clear that the property sector is not a source of sustainable growth going forward. And I think that is what investors are really trying to grapple with, which is that we have been used to property sector support for so long, right? And now these big names are starting to fail so that the ripple on effects to the rest of the economy in terms of households balance sheets, in terms of bank lending, that is going to have a very big confidence effect on households and corporates like we think.
Felicity:
And what what wider impact might that have on China’s economy? What would it mean for GDP there?
Louise:
Yeah, it’s a good question. So currently, currently, the Chinese authorities have a growth forecast about 5%. If we were to kind of model what a crisis to the skill of evergrande if you remember in 2021, if you kind of mimic that that kind of a level of confidence shock into the current economic circumstances, we see a around a 0.5 percentage point shave off that 5% growth target so likely, growth will trend at about 4.5%. And in China’s in China’s history, economic history, that is quite a weak number. And that is likely to to also entail a host of economic and social issues that come with that. Of course, the main channels to that impact will be private investments especially on the property side. But we have been seeing the negative effects of weak property numbers feeding true to household consumption patterns, feeding true to how companies think about their business outlook. So really, I think that the impact is actually much bigger than that what the numbers are suggesting on on some of the high frequency indicators that we see.
Felicity:
Louise Lou China economist at Oxford Economics based in Singapore, thank you so much for joining us this morning explaining that to us. So clearly. Russ Mold listening to that. I mean, China, the world’s second largest economy, hugely, hugely significant trade ties to pretty much everywhere in the planet. What might it mean for the global economy? If we do see this particular business move towards collapsing?
Russ:
I mean it’s interesting we can see in the Japanese export numbers today, they were a lot weaker than expected and China is one of the reasons why that’s probably a function of Chinese economic weakness, but also sanctions, because Japan’s sale of things like silicon chips to China went down very dramatically, and the west is pushing back on that very, very hard. So there’s a combination of different factors. But yeah, if the world’s second biggest economy slows down, you would expect that as have an impact, and additionally, there are some lessons here you know, too much cheap debt, too much cheap money, too much property speculation, and too much badly allocated capital, which is a lesson for many of us in the West to think about, given that, you know, there has been an awful lot of cheap money and cheap debt sloshing around here for the last 15 years as well.
Felicity:
Thank you. So still with me is Caroline Casey, Founder of the Valuable 500 which is a global business partnership working to end disability exclusion. Caroline I must ask you about this news story this morning. That human rights watchdog has accused the government of making slow progress in improving the lives of disabled people. So seven years ago, a UN committee investigated the rights of people with disabilities in the UK and it called for changes in areas like welfare, like employment. And now the UK’s equality and human rights commission has delivered its own assessment and says that there’s been no progress in monitoring the impact of welfare reforms or things like access to justice for disabled people and the report also found gaps in meaningful engagement. Reading that, I suppose it’s it’s similar what you were saying about the importance of actually having the data so that we can see where we need to make the improvements.
Caroline:
Absolutely. Yeah, and reports like this. This is the stuff that we why we do what we do, and I’ll be honest, it’s why we work with the private sector because we need the force and the influence of that collective mass to put pressure on governments as well. Okay. But the thing that really strikes me about this is where are people’s voices with people with disabilities in designing welfare systems and education systems and transportation systems, so that their voice is meaningfully at the table? An awful lot of initiatives and programmes are done for people with disabilities, not with people with disabilities? And this has been a huge issue because we do have a lack of the voice and experience of disabled people in leadership positions, in governments, in businesses and then not for profits. And if we do not have that voice and lived experience, I genuinely do not see systemic change. I do not see it accelerating. But one of the reasons with the Valuable 500 that we hope by bringing together that force of business, which is money, which is power, to actually work with government, particularly we’re talking about employment, because that is one of the huge issues, but you can’t increase the level of people with disabilities and employment. Honestly, if you look at inclusive education systems, inclusive transport to get people to work, if they’re going to work, it’s everything is interconnected, and I think doing or designing any system without having people who are living it be part of that solution. I think we’re going to consistently fail. I really do. I don’t it’s obvious to me. And I think that’s something that people with disabilities in the community are asking for and insisting upon.
Felicity:
A government spokesperson said last month we create we launched a consultation on our new Disability Action Plan, which is part of this government’s commitment to create a society that works for everyone and they said significant work is already been taken forward, including reforming the health and disability benefits system, boosting disability benefits by 10.1% and investing 2 billion pounds to support sick and disabled people back into work. Does that give you some hope that things are might start to improve? We might start to see some of the changes that we need.
Caroline:
Okay, so then from my perspective is disability benefits yes are essential but what I want to see is the pull of the private sector or business bringing people with disabilities into the workforce, creating cultures where people can thrive and survive, and more importantly, surfing with people with disabilities as consumers so we’re raising the expectation of people with disabilities our parents of children with disabilities, it’s not just about benefits. It’s about making sure that whole pipeline from the time that you are born in education right through into work, we’re creating the expectation and the sport and designing a system where we can thrive. So benefit is only one part of that, we need to look at how we can get people into work and keep them there meaningfully with careers, not just you know, jobs, but a career so that people can grow and develop and contribute.
Felicity:
Caroline, thank you very much. Lots of people talking about university and exam results today. We’ve had one message that says: “University is great for some people going straight to work from school is great for others. The idea that unless you’ve gone to university you’ve failed is completely ridiculous. There are plenty of careers where you don’t need a degree. You just need to work hard and have a willingness to learn.” Thank you very much for that. Do keep your thoughts coming this morning. But now it’s going to be a pretty big weekend.
Felicity:
I hope somebody gave her a mint to suck after that. The excitement! It was just incredible, wasn’t it? England take on Spain in the final of the Women’s World Cup on Sunday at 11am UK time. This is after that stunning three one victory against the co hosts Australia yesterday. Let’s talk to Lisa Parfitt, who’s a co-founder of the sports marketing agency the space between and is on the board of women in football, which is a network of I think the name might slightly give it away women working in football Lisa Good morning.
Lisa:
Good Morning Felicity!
Felicity:
Well, we’ll talk business in just a moment. But first of all, how excited are you as a fan firstly, but also as a woman working in football.
Lisa:
Well, I woken up this morning and I wondered whether I had it was a dream. What happened yesterday. The fact that we’re having this conversation this morning and having a quick look this morning at the front pages of all of our national newspapers is clearly not it’s so exciting as a fan. This England team is a team that you can have complete faith in. They’re an absolute joy to watch and the players and the women are just such engaging, authentic, amazing role models. There’s there are you know, there’s so there’s so many things that I could say about how wonderful it is as a fan, but it is just it’s just been pure joy.
Felicity:
It is pure joy. It’s always a marketer’s dream, isn’t it because you can’t manufacture that joy. It’s there authentically or it’s not.
Lisa:
You’re absolutely right. And I suppose this gets us into the business quite quickly that you know what, what we’ve seen is an explosion of brands and the use of the lionesses and the players and that that yeah, that iconic lioness brand. In marketing, you know, you can’t get away from it. You’ve got brands who are promoting products, we’ve got phones and food and supermarkets and healthy eating, and b2b brands using it, like the likes of Xero or an accounting software partner who are using it to promote and support women in business as well. Because they have the same dreams that lionesses do and these these women absolutely transcend. And in terms of the commercial growth and strength of women’s sport, it really is a marketer’s dream.
Felicity:
It’s very interesting to hear when you were saying that there’s a accounting software company, and I thought, well, what what does that got to do with really with football? Is anyone really going to be thinking I need to upgrade my accounting software, but you’re so good, actually. It’s that sort of feeding into the more positive messages that that lots of brands want to incorporate within their companies.
Lisa:
Exactly that and what’s interesting is actually, we’ve always known that the women’s sport platform to use in marketing does inherently have more purposeful kind of values to it. The opportunity to be able to talk about gender equality and supportive women and the likes of Xero doing exactly that. Business women. Those women that are founding businesses have exactly the same dreams, the lionesses, it might not be to win a World Cup. It might just be to open a business where it’s next week and move into a new offence or to hit a million million pounds for revenue. But the dreams are exactly the same. And actually, you know, people totally get it they get that connection between these women who are absolutely smashing it on the pitch and doing amazing things, who are representing all women and women young and old really look up to them.
Felicity:
Do you know what I really love is that sitting in the studio where I am, I can see Caroline who’s been my guest throughout the programme. I can see her on a screen and she’s just been beaming the whole time. Occasionally nodding the whole time you’re talking. Now Caroline we’re almost out of time but but briefly, this is this is touching very much on what you were saying at the start of the show.
Caroline:
Oh, yes. I’m thrilled because one thing is this is a shared cultural moment. Right. It’s fantastic. And I think that’s what we’re all yearning for. But you know what makes me smile hair. Westham under Karen Brady was one I think was number 15 to join the Valuable 500 so go women and I think what I get excited about is when we start seeing brands and very fairplay to zero to fight for sponsorship, something’s changing. We are changing.
Felicity:
We are so nearly out of time. But Lisa very briefly, you manage two girls football teams. What does this mean for them?
Lisa:
Oh, I do. Well, they’re absolutely glued. My daughters are absolutely glued to it. What it what it what it means is there’s a real possibility they see on the TV a real possibility that Football is a game for them, whether that’s playing, whether that’s looking at all the broadcasters that are you know, coming to our screens each week doing an amazing job they see what football as a game to them.
Felicity:
I love it! Lisa Parfitt, co founder of the space between us, a sports marketing agency. Thank you. Thank you, Caroline Casey, Founder of the Valuable 500. Thanks as always, Russ Mold from AJ Bell.
