Supply Chain Pulse

Tony Hines explores recent economic developments, technology partnerships, and significant supply chain disruptions affecting global business operations.

• Bank of England keeps interest rates at 4% while US Federal Reserve makes surprising quarter-percent cut
• President Trump's UK visit secures £150 billion in investment commitments from companies including Blackstone, Microsoft, and Google
• NVIDIA invests $5 billion in Intel, creating historic partnership to integrate technologies and strengthen both companies' market positions
• Huawei announces strategic chip development plans ahead of Xi-Trump meeting
• Curry's disbands its ESG committee, potentially signaling changing corporate priorities around sustainability reporting
• JLR faces severe disruption from cyber attack entering its third week, halting production and affecting 200,000 supply chain workers
• Shipping industry prepares for uncertain US port fees and increasing cargo theft as holiday season approaches
• Questions arise about infrastructure capacity to support £25 billion in data center investments announced since July

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Chapters

• 0:00 Introduction to Chain Reaction
• 0:39 Global Interest Rate Updates
• 2:53 Trump's UK Visit and Investment Deals
• 5:01 NVIDIA's $5B Investment in Intel
• 7:47 Huawei's Chip Strategy Announcement
• 9:07 Curry's Disbands ESG Committee
• 12:29 JLR's Cyber Attack Crisis
• 15:34 Shipping Industry Challenges
• 18:02 Tech Investment and Infrastructure Concerns
• 20:04 Episode Conclusion

Transcript

Tony Hines: 0:00

Tony Hines. Here you're listening to Chain Reaction all about supply chain advantage. Well, great to be here and thanks for dropping by today. Great episode coming your way in just a few moments. So stick around, stay tuned, stay informed and stay ahead with Chain Reaction. Subscribe to Chain Reaction. You'll be first to know when new episodes are out and you'll never miss an episode Chain Reaction and you'll never miss an episode.

Tony Hines: 0:39

In the UK this week, the Bank of England left the interest rate where it was at 4% and the Governor of the Bank of England said we're not out of the woods yet in terms of rising inflation. This is mainly what analysts had expected, so there's no change here. What was surprising is the Fed reserves fall in interest rates by a quarter of a percent in the United States because the numbers don't seem to support an interest rate fall. So that was a bit surprising. But I say it was surprising. I think it had been predicted because the head of the Fed Reserve, jerome Powell, is of course, under intense pressure, as are his colleagues on the Fed Reserve, from the President, who wants more than just a quarter of a percent fall. He wanted a bigger fall in the interest rate and he's been putting pressure on for some time. As you've heard me say in Chain Reaction previously, there are two further meetings of the Monetary Policy Committee who set these interest rates at the Bank of England before the end of the year and of course it's hoped that interest rates would fall again. But the numbers in the UK again don't justify a fall presently and it really depends what happens in the budget on the 26th of November as to whether a further fall is likely or not. The Bank of England's interest rate target is 2% and of course the UK interest rate is 4%, and that's because the inflation rate in the UK is actually 3.8%, which is nearly double the bank's target figure. Out of the nine-member committee in the UK on the Monetary Policy Committee, it was just two people who wanted a fall in the rate and seven voted for no change.

Tony Hines: 2:53

Well, president Trump had his second state visit to the United Kingdom this week and the UK government said it's secured £150 billion worth of investment which it hopes will create 7,600 jobs. But of course, embarrassingly, 1,600 jobs have gone from the UK economy. As a consequence of those national insurance rises earlier in the year, several drug companies, such as AstraZeneca, have also stopped their investment plans in the UK. They've said it's increasingly challenging to do business in the UK. A big proportion of that 150 billion investment will come from Blackstone over the next decade, so it's over a number of years. It's not instant, of course. The US private equity firm announced in June it would spend 370 billion across Europe over 10 years. So a big chunk of that spend across Europe over 10 years, so a big chunk of that spend the £90 billion is coming to the UK. The technology deals that have been made will see the UK and US cooperate in areas such as artificial intelligence, quantum computing and, of course, nuclear power. Microsoft said it will spend £22 billion, google £5 billion over the next two years to expand existing data centres in Hertfordshire. While the Prime Minister is claiming that this is a success which it is, he's also said it's a testament to Britain's economic strength, as a bold signal that our country is open, ambitious and ready to lead. It's important that we do become a destination of choice, according to the Prime Minister. Meanwhile, the Office for National Statistics in the UK has said that vacancies are down by 119,000, that's 14% in June to August 2025, from the level they were a year ago, and many firms are suffering from those increased national insurance costs.

Tony Hines: 4:48

As I've said, nvidia this week invested $5 billion in Intel. It's viewed by the markets as a good deal. It bolsters up Intel's flagging performance and, of course, it puts NVIDIA in a very good place in the market. It's a historic partnership between these two giant chip makers. Mr Hang, of course, was present at the banquet given by the UK government Britain's king chart for President Trump. Nvidia has a key role in artificial intelligence. It's made it the world's most valuable company it's worth about 4.3 trillion and President Trump and his government have also taken a 10% stake in Intel, so their shares have gone up 28% this week.

Tony Hines: 5:47

The deal is seen as a market opportunity. It represents about $50 billion a year. It will allow Intel to integrate its x86 central processing units into NVIDIA's state-of-the-art data centers, and that will benefit Intel's cloud computing customers of the art data centers and that will benefit Intel's cloud computing customers. And it allows NVIDIA to integrate its graphics processing units, gpus, into Intel's x86-powered personal computers. The central plank of the collaboration is NVIDIA's NVLink, which speeds up communication across GPUs and between GPUs and CPUs, which NVIDIA recently made available to third parties. It helps reinforce NVIDIA's position as a partner of choice in the world of AI. If it can get more systems to run on NVLink as a standard, well, that really seals the deal.

Tony Hines: 6:39

It's been about a year in the making, apparently, this deal, and it's a vote of confidence in Intel. They've struggled against ARM, which is mostly owned now by Japan's SoftBank. Arm was originally a British company and defensed micro -devices, whose shares have slid on the news. It doesn't do much for its contract manufacturing, though, or the foundry business, which is another key pillar of survival. Mr Hang doesn't claim to have any interest in Intel's foundry business. In fact, they leaped praise on TSMC, which is the world's biggest contract chip maker, based in Taiwan, and it has both Intel and NVIDIA as its clients. So we'll have to see how this one plays out, but it looks a good move for both companies.

Tony Hines: 7:27

At this particular time, ahead of Friday's meeting between President Xi Jinping and President Trump on Friday and President Trump on Friday, huawei has decided to outline its plans on chips and its computing power. It's the first time they've done this. They've always been very secretive, but obviously they're interested in making the statement public right now. So they're going to follow a one-year release cycle and double compute with each release. China in recent weeks has stepped up its efforts to target NVIDIA, the world's dominant AI chipmaker, while promoting its own chipmaking in China. The Chinese have accused NVIDIA of violating their country's anti-monopoly law and they don't want top tech firms to purchase NVIDIA AI chips, particularly the H20 chips. It's likely to be seen as a tactic to increase pressure on President Trump prior to the talks and the negotiations that take place later in the week. The message is we're doing very well, how are you doing? And, by all accounts, it looks as if they are doing very well, and it looks that the big tech American companies Intel and Nvidia are doing less well, and that's certainly the message that they want to get across.

Tony Hines: 9:07

The FTSE 100 has 54% of companies in the list with ESG committees. That's environment, social and governance, and you'll recall that that was an important requirement over the past few years as companies strove to put those green credentials, those sustainability credentials, right up front. They wanted the badge and the recognition that they were a sustainable company, meaning they were concerned for the environment, for the social and for governance. So sustainability was an important focus. But this week, curry's have just disbanded the ESG committee which reported to the board, and some see this as a backward step. It's a downgrading of that committee, and a committee that doesn't report to the main board is seen as less important, of course, both inside the organisation and outside, and it might say something about the sustainability credentials to the outer world, although a spokesman for the company said that's not the case. They are committed, but they've just decided that the board itself can take responsibility for sustainability and they want everybody in the organisation to take responsibility for sustainability. But nevertheless, it's how it's seen outside.

Tony Hines: 10:30

That's important too, and there is concern that other companies may follow suit, and there is concern that other companies may follow suit and there might be a row back on the way in which companies are striving for sustainability, and some sustainability groups, of course, have seen this as a retrograde step. So I think it's probably something to keep an eye on to see whether ESG stays up there. It's probably quite expensive to maintain these committees that are taking a look at sustainability, and I think there's been some concern that there's been quite a bit of greenwashing and just basically a PR exercise. There are concerns about whether the data is sufficient to make those decisions and take into account sustainability issues in decision making, and I think it does need high quality data. But whether you should lower the temperature on ESG, well, that's an entirely new matter, and I think in supply chains, of course, esg is a very important issue. I think the issue here is how companies deal with it. It's very complex to have people with the right skill sets and the right types of advice that are needed to support decision-making inside companies, and advisors to the board need to have a good skill set and proper credentials to do that, without making it seem that they are simply pandering to pressure put on from outside, and that's going to be something that's going to be on the agenda for some time, I think. So curries may just be the start. Will there be more companies to follow? Will it turn into an avalanche? Well, we need to wait and see.

Tony Hines: 12:29

Now you might be hearing the news about Jaguar, land Rover, jlr. They've been having a torrid time with cyber attacks and it's causing all kinds of disruption to the workforce attacks and it's causing all kinds of disruption to the workforce, to productivity, their production schedules and, of course, to many firms in the JLR supply chain, and that really is quite serious. It's been a couple of weeks now since they've been having these cyber problems which have halted production, and it's rumoured that they could go on for several weeks longer. And that's a concern for many companies who do business with JLR supplying goods and services. And of course it's affected their supply chain and it's affected their payment systems so they're unable to pay for any services in the same way that they have been doing in the past. So how long this is likely to go on is difficult to assess.

Tony Hines: 13:22

In the UK government, cyber security experts have been drafted in to advise JLR after the cyber attack forced it to shut down its production. It's the first time manufacturing has been halted and it's been three weeks nearly now. Officials met representatives of carmaker suppliers which employ about 200,000 people, and JLR is the largest automotive employer in the United Kingdom with more than 30,000 staff directly employed by the company. Its affected operations in Merseyside and West Midlands and hopes of sorting it out soon are fading. The Department for Business and Trade and JLR's trade body, the Society of Motor Manufacturers and Traders, made a comment. They said the recent cyber incident is having a significant impact on JLR in the wider automotive supply chain. The government, including government cyber experts, are in contact with the company to support the task of restoring production operations and are working closely with JLR to understand any impacts on the supply chain. The SMMT held an extraordinary meeting of its automotive components section, attended by DBT officials, and they're still trying to understand what's happening.

Tony Hines: 14:42

Jlr is under pressure from MPs, members of Parliament in both the Midlands and Merseyside, and from the Unite Union. They all want to resolve this issue as fast as they can, for obvious reasons. Business experts agree that JLR is a fabulously profitable business in recent times. It's bankrolled, of course, by its parent, tata, and it's estimated they will have lost so far about £120 million during this cybersecurity crisis. The company said its focus is on the global supply chain, our retail partners, our clients and our people, and they're working round the clock to restart global applications in a controlled and safe manner.

Tony Hines: 15:29

So how serious is that and where has this attack come from? Is the bigger question. Dsv Global Transport and Logistics, the world's largest freight forwarder, reported this week that they saw the future as being significantly uncertain with regard to port fees that the United States is expected to implement in the middle of next month, it was stated at a London International Shipping Week 2025 conference by German Shipowners Association. Dr Martin Kroger said that one of the biggest problems right now for the industry is the US President and the administration. President Trump complicates shipping challenges, says the director of the German Shipping Association. Another piece of news coming out this week is that four employees have sued AP Muller-Mersk for allegedly losing millions of US dollars due to poor investment decisions regarding the employees' pension funds. And another interesting story I saw was about cargo theft and how that's increasing as we move into the Christmas period. It was stated by the head of security at Kuna and Nagel, and Thornton Newman, ceo of Transported Asset Protection Association, emea.

Tony Hines: 16:58

And you'll have heard the sustainability issue I talked about earlier on with ESG and so on. Sustainability issue I talked about earlier on with ESG and so on. Well, the International Maritime Organization have a crucial vote on climate regulations in mid-October, so it'll be interesting to see how they're moving, what the trends are, and we'll come back to that one. And then there were moves by Chinese-controlled shipping company, sea Legend, which will begin a journey north of Russia. There's a lot of movement at the moment trying to sail through the Northeast Passage because it's a shorter route between the Atlantic Ocean and the Pacific Ocean. It means far fewer days in sailing those alternative routes, but of course it's risky if they get stuck for any reason. They're opening this sailing route again in 2026. But some big companies like AP, mollemask and CMB Tech are not going to be doing that. They've stated they won't be following that particular pathway.

Tony Hines: 18:02

Well, there was a large tech investment announced at the state banquet for Donald Trump this week, or certainly around that meeting, which came out. I think it's about £150 billion. That's been mooted in some quarters. Some other figures I've seen talk about £250 billion and I think Trump himself said somewhere but he would, wouldn't he. It's about £350 billion. So there's an array of figures flushing about, but I think the most verified figure is about £150 billion.

Tony Hines: 18:34

And since the Labour government came to power in the UK in July last year, there's been announcements of about £25 billion worth of investment in data centres. Now, that's all very positive but, as everybody knows, data centres demand lots of energy and they consume lots of water. So is the infrastructure. There is the question to support those data centres. Infrastructure there is the question to support those data centres. Well, there are many critics that say it's not quite there yet and it's how those data centres can plug in to the grid to get the electricity that they need to power them? That's a big question and, with energy and energy cost already under pressure in the UK with the move and the transition towards greener sources of energy, can they be powered by green sources of energy? Well, the answer is probably not. It needs a mix and it will probably demand more oil and gas to process and produce that energy. So the government is going to need to ensure that they have policies to make the infrastructure that's needed for these investments and that might demand more public investment to do that.

Tony Hines: 20:04

Thanks for joining us on Chain Reaction. I hope you've enjoyed the episode, I hope you've learned something new and I hope you'll come back next time when we'll have another edition of Chain Reaction. Until then, take care, I'm Tony Hines, I'm signing off and I'll see you next time. Bye, for now. You've been listening to the Chain Reaction Podcast, written, presented and produced by Tony Hines.