Mass protests in Tehran today, fierce anger over the economy.
There are long queues everywhere, in front of bakeries, at fuel stations, everywhere you look.
Even the bakeries have stopped giving out flour.
Food prices have gone up by like four times what they were a year ago.
The economy has ground to a halt.
Is Iran crumbling?
This is World Business Report from the BBC World Service.
I'm Ed Butler, and today we're going to be looking at the second day of mass protests in Tehran, as thousands appear to have defied tight police controls and demonstrated over the collapsing state of the currency.
We hear what's going on and we look at how deeply computer hacking risks the entire auto industry supply chains.
First though, let's go to Tehran and get a sense of what life is really like on the streets of the Iranian capital today.
The sound there of a mass of street traders in Tehran shouting death to the dictator, a reference to the supreme leader, Ayatollah Ali Khatamiyeh.
And you can hear underneath them the voice of a rather forlorn policeman with a loud hailer telling them to moderate their language.
The reason they're so upset?
Well, it's the rapidly falling value of the Iranian currency, the rial.
It's the second successive day of protests in Tehran.
Many traders have shut their shops.
We understand saying exchange rates mean they can no longer trade.
The authorities have warned against unrest.
To get a sense of the scale of the problem and its background, I've been speaking to BBC Persian's economics editor, Berang Tajdin.
We saw a few protests on Sunday around the major bazaars in Tehran, basically traders and business people protesting not just against the falling value of Iranian currency rial, but the fact that there is no certainty, and it's been falling over the past six months.
It has fallen by something like 40%, maybe even more than 40%.
And are a lot of the goods imported?
Is that why that matters?
Of course.
And also there are lots and lots of goods that their price is more or less dictated by the foreign exchange rate.
Because, for example, if a fridge is made in Iran, parts of it may be imported from China or other countries.
And more importantly, if the fully imported one becomes more expensive, then the Iranian made one also becomes a bit more expensive.
That's kind of the law of the markets.
The head of the central bank has resigned, I'm reading as well.
Orr has been asked to resign, reflecting a long-running dissatisfaction with the way he had run the central bank.
One of the reasons he hasn't been very popular is the fact that he advocates for the fact that we don't have one single foreign exchange rate in Iran.
We have multiples of them.
And that has provided the space for...
For a lot of people you know benefiting from having access to government set exchange rates so they can, you know, make a lot of money out of that.
And it is more or less it's corruption.
He has been advocating for that.
And some people are kind of surprised that it took more than a year for President Pesachkian to change him.
These protests.
When we saw mass protests three years ago in Iran, they seemed almost existential in terms of the threat to the government.
When they were at their height, there was a big economic element to them, wasn't there?
There was a great sense of discontent about rising unemployment and rising prices.
Is that worse now than it was three years ago?
Yes, it is.
The official inflation rate is at 42.2%.
In the past 12 months, the food prices have gone up by more than 72% on average.
You know, there are items that are like three times, four times what they were a year ago.
That's the cost of living situation.
The economy has ground to a halt.
We are in a period of recession.
The job market almost non-existent.
Berang Tajdin.
Well back a few months ago, in June, we at World Business Report did get the thoughts of a few ordinary Iranians about the state of their economy.
This was at the time of the 12-day war with Israel and the US.
This woman, Narges, lived in the city of Isfahan.
I can't afford to leave the city.
My husband is paid daily.
So if he doesn't work, we have no income.
There are long queues everywhere in front of bakeries, at fuel stations, everywhere you look.
Even the bakeries have stopped giving out flour.
They can't bake because there's no electricity.
On top of that, food prices have doubled.
And we also heard from Ali, who lives in Karaj, near to Tehran.
This regime has suppressed us for four decades.
How could they expect any of us to support them or fight for them?
We believe this is the end.
I hope people decide to take over the streets and get rid of this regime.
I don't have anything to lose.
The thoughts of some Iranians speaking earlier this year.
Well, the BBC's Behrang Tajdin says that the level of discontent we heard there is symptomatic of the plight of millions of Iranians now.
The employment rate is around 40%.
And only one in nine women work because of the state being ideological, very conservative.
That doesn't want many women to work and there aren't many job opportunities for women.
Overall, the economic situation is terrible.
And the fact that you have these crippling sanctions by the United States that have become even more severe after the 12-day war between Iran and Israel.
The economy has ground to a halt and the Supreme Leader, Ayatollah Ali Khamenei, hasn't shown any willingness to come to an agreement with the United States to kind of let Iran be a member of the global community again and, you know, to have some sort of a prospect of a better future.
Right now, the only thing that he talks about is resistance economy.
And resistance economy isn't a very flourishing one.
Is that then the only answer as far as you or serious economists would describe it?
Is there a clear path out of this that doesn't involve suing for a lifting of the sanctions?
For the long-term problems of the Iranian economy, there isn't an economic solution.
There is a political problem, and until that political problem isn't resolved, you can tinker around the edges, but you can't get Iran to the point that it becomes part of the international supply chain.
That's the fundamental problem that doesn't have an economic solution.
Birang Tajdeen of the BBC's Persian service.
When one of the UK's most famous brands, Jaguar Land Rover, was targeted by hackers back in September, it shone a light on a deep-seated vulnerability within the global auto business.
One estimate suggested that the hack in late August cost the UK economy as a whole some 25 billion.
The BBC's Theo Leggett has been asking what it also reveals about the wider car-making supply chain.
JLR is a Midlands motoring giant, but it's been thrown into crisis by a single cyber attack.
One hack, Jagiba.
Land Rover has confirmed it will extend its shutdown until the 1st of October, following a cyber attack at the end of August.
It's clearly a very, very serious breach of their cyber security, which is taking a lot of time to unpack and get to grips with.
A devastating cyber attack at the end of August forced Jaguar Land Rover to shut down its computer networks and left it unable to build or sell any cars.
Defender is an icon reimagined.
For a company whose advertising highlights the robust and high-tech nature of its products, this was deeply embarrassing.
This is the toughest and strongest vehicle we've ever created.
At the time, Andy Palmer, a former boss of Aston Martin, explained what made a car manufacturer particularly vulnerable to this kind of disruption.
We have software that very much links the ordering of parts to the manufacturing of vehicles, to the wholesale and then to the retail.
You break one part of that chain and everything stops.
And that's essentially what's happened here.
Jaguar Land Rover normally makes more than 1000 cars a day at its factories around the world, but production was crippled for more than five weeks.
And while the impact on JLR itself was severe, a swathe of other businesses, the carmaker's suppliers, were also hit, as David Leggett of Global Data Automotive explains.
If you think of a typical vehicle, it could have up to 20000 component parts with thousands of suppliers around the world.
When manufacturing operations stop at the top, then the whole supply chain underneath that think of it as a pyramid the whole supply chain underneath that seizes up because there is nowhere for the component parts and output to go and the factories therefore grind to a halt.
Among JLR's main suppliers is Evtech Group.
It makes engine parts at a plant in the English Midlands.
More than a month into the stoppage, I went there to have a look around.
The normally bustling factory was eerily quiet, and boxes of undelivered parts were stacked up from floor to ceiling in every available space.
EFTEC's chairman, David Roberts, told me what was going on.
We stopped sales in early September so we've had to take stringent cost measures to protect the business, make sure we survive.
That's involved unfortunately, sending people home because we couldn't do any productive work for them.
But clearly that can't last.
Fortunately, it didn't last.
In October, JLR resumed production and eventually so did its suppliers.
Recently I went back to David Roberts and I asked him how he'd felt when he first realised the severity of the situation.
It's one of those heart-stopping moments in your life where you really say, is this it?
And, of course, immediately we saw a loss of all our sales and all our orders and forward orders and sales.
You know, when you lose sight of orders overnight, that creates real stress.
According to the Cyber Monitoring Centre, a non-profit group which looks at the impact of hacking incidents, the attack on JLR caused financial losses of more than 25 billion and affected more than 5000 organisations in the UK alone.
Professor Ciarán Martin is chair of the centre's technical committee.
He believes the affair has exposed a key vulnerability in the way developed nations protect themselves against cyber threats.
Under no sensible definition of absolutely critical infrastructure does JLR count.
It's not the national grid.
It's not one of the big banks.
It's a car maker.
But it's the next level down where...
Lots of economic activity, lots of prosperity, lots of people's jobs, lots of local well-being depend on it.
It's easy enough when the government's brought forward legislation to regulate the big providers, people who will notice, because the lights will go out or we can't withdraw our money, and so forth.
And you have to apply special obligations to them.
That next level down, I think... is a really serious systemic vulnerability in all our economies.
JLR is now back up to full production and it seems fears that many of its smaller suppliers might not survive have not been realised.
Nevertheless, the affair has shown clearly how vulnerable our economies can be, with an attack on one key company causing havoc for thousands more.
The BBC's Theo Leggett with that report on Jaguar Land Rover.
You're with the World Business Report from the BBC World Service.
OK, let's turn to the markets news now.
Peter Jankowski is vice president of research and analysis at Arbor Financial Services in Chicago.
Peter, hi.
Good to have you with us.
So I'm seeing the S&P closing lower on Monday.
Tech names, big ones, Nvidia, Tesla down.
What's been happening?
Well, I think there is some profit taking going on.
Tech has been very volatile, very profitable trade throughout the year, but extremely volatile.
And we're definitely seeing the volatility there pick up as people have become concerned about AI and the sustainability of the AI related rally.
Yeah, volatility.
Is it catching?
Because it's been a crazy day for metals as well, hasn't it?
We were talking about gold, silver, copper, platinum, all of those things last week.
Copper prices were up by the most in over a decade.
Today, they've had a 5% crash.
Silver, something like a 10% drop today.
Well, indeed, some of those rallies were overdone, as we've seen in the tech shares as well.
So people that are trading as opposed to holding them for the long term are trying to take some profits here before the end of the year.
Let's talk about the end of the year then.
Let's talk about how the stock market in America has performed generally.
There's a big headline in the Financial Times today I saw.
Others have commented over the weekend.
US stocks... did pretty well.
12 15, 17 it depends which of the markets we're looking at but they were up considerably this year, but they were still eclipsed by the rest of the world.
This is interesting, isn't it?
Because, yeah, we were talking about the strength, particularly of those big tech companies in 2025.
But is there a risk that maybe the US markets, which have always looked so robust to many investors, are looking a little bit less desirable now in comparison with some of the others?
Well, I think people are looking at the very high valuation of US stocks and seeking to diversify by going to foreign countries where the valuations are not quite as rich as the US.
Another factor that plays into it is, of course, the value of the US dollar, which has been fairly strong the last few years, actually declined 10 last year.
And that, of course, makes the U.S. market less attractive to foreign investors.
Yeah, I mean, it's half full, half empty questions.
Now I've seen the chief executive of Jupiter Asset Management quoted in that FTPs describing his approach to equity investing in 2026 as anything but America in quotation marks, which sounds quite strong position to take.
But I mean, there is that long seated feeling, isn't there, that maybe tech, which of course has held the market up for so long, is pretty substantially overpriced.
Well, tech definitely is, I think, overpriced.
But there are pockets within the U.S. market that do have reasonable valuations.
So I think avoiding the U.S. overall is a bit extreme.
There are areas of the US market, particularly consumer staple type stocks, where one can find some good value.
Peter Jankowskis, thanks very much indeed.
Well, with 2025 almost over, we've been reflecting on some of the big names shaping the global economy.
Today, we're looking at the defence industry.
Military spending worldwide is at its highest levels on record.
As governments respond to the risk of war, geopolitical tensions, longer-term security risks.
Global military expenditure has reached 27 trillion in 2024, nearly a 10 increase, the steepest year-on-year rise since at least the end of the Cold War.
To discuss this, I'm joined by Seamus Daniels.
He's a fellow for Defence Budget Analysis at the Centre for Strategic and International Studies in Washington DC.
Hi, Seamus.
So what is this, an arms race?
Thanks for having me on the program.
Well, 2025 has certainly shown a continuation of the trend of high military spending globally, and that's driven by a number of factors.
Most notably obviously, is the conflict in Ukraine which, since 2022, has really prompted increased spending from European states as well as Russia, as well as increased defense spending and higher announced growth from China as well.
Yes.
And of course, we're seeing military maneuvers around Taiwan this week.
That, I guess, gets a lot of people anxious.
I know the Japanese are now looking again at their defense industry.
It's a corporate jamboree as well, isn't it, for the new defense firms?
I mean there's an FT headline I saw today saying that Europe's largest defense groups are set to return 5 billion to shareholders in new dividends this year.
Yes, there's a major focus, especially in the United States and on the part of European countries, to modernize key military capabilities.
So what that really entails is increased spending on research and development to develop those new systems and platforms, and then more funding to actually procure and buy those systems.
But the key thing to also keep in mind that, as defense budgets are increasing, it's not only going to those modernization programs, but we have to keep in mind that a large portion of a state's military budget also goes to the cost of its people, its service members, to pay them and to provide health care and other benefits, as well as the cost to operate and deploy military forces and conduct maintenance on those forces as well.
Hmm.
What interests me, I think, also is what the money now needs to go on.
I mean there's been a lot of debate, I know, in the UK about, you know, building a battleship, a huge aircraft carrier.
And then is that actually what we need as a modern armed forces?
Because maybe we're not going to be fighting big wars at sea.
Maybe we are.
The Ukraine has been a kind of test case, hasn't it, for what modern warfare may look like.
And for a lot of people looking at it, they're saying it's drones, drones, drones.
Yes, we are certainly seeing the significant use of drones in Ukraine.
And a lot of people point to the conflict as potentially what a future conflict may look like for the United States, for many countries in the West.
But it's important to keep in mind that Ukraine is one specific theater.
So other geographic regions could see the different styles of warfare.
So what we're seeing exactly in Ukraine may not be the case for a conflict in the Middle East or a conflict in the Indo-Pacific, where you will have greater emphasis placed on platforms both in the maritime and air domains.
Yeah.
And you will also have a focus on things like automated systems, automated military systems.
I mean, do you think Western defence firms are set up for this?
I think right now Western defense ministries, departments of defense and defense companies are really trying to envision what the future of warfare is going to look like.
And I think you're exactly right.
We're going to see significant more automation and artificial intelligence in play.
And there certainly will be higher use of unmanned systems as well going forward.
Seamus Daniels, a fellow there for Defence Budget Analysis at the Centre for Strategic and International Studies in Washington DC.
My thanks to you.
So artificial intelligence it is driving a shake-up in defence and it's also driving a shake-up in the legal profession worldwide.
It's pitting tech nerds against legal Luddites, if you will, young and old, and potentially disrupting the business model that underpins all of it.
In the second of our AI series from New Zealand, our correspondent, Alex Funvell has been talking to those facing disruption in the most conservative of professions the law.
From his downtown Auckland chambers, barrister Josh McBride is becoming known as an AI pioneer.
I'm sitting here in the pilot seat, in my desktop cockpit, watching all of this stuff move around and effectively, I suppose, being something like a conductor in an orchestra.
McBride's pushing the boundaries in an industry that doesn't take kindly to change.
All right.
So what I'm going to show you is some workflows that I'm developing using a tool called Notion, which I've been playing with now for most of this year.
And broadly what it does is it sets up a three-dimensional model of what this case is about, with lots of spinning moving parts.
What it then allows me to do on top of that is I can go into Clawed.
So now I've got it set up, where I can use Claude to ask, for instance, what have I got on this week?
Tell me what the priority should be.
I can say to it, someone's just asked me to have a telephone call to discuss this issue.
Prepare a speaking note for me based on what you know about the case.
Of course, Claude isn't a human colleague.
It's a chatbot, a large language model, working as McBride's assistant.
I'm Deborah Manning.
I'm a lawyer and I have specialised in refugee and human rights law, and I'm also a senior lecturer at AUT.
How I see AI is that it's a tool.
It's a new tool and we need to know how to use it, and we need to know how to use it responsibly and, as a teacher, we need to be able to teach our students and future lawyers about how to use it in a way that we have critical thinking and responsibility.
So if we're using AI as a tool to help us summarize complex cases, to draw out, for example, key themes or principles, that's okay.
But my approach to AI is that it's a starting point.
It's not the finishing point. and everything needs to be checked and double-checked.
The legal reticence perhaps to adopt AI is based on earlier versions of generative AI.
Throwing out pleasing answers that almost sound too good to be true, and yet to a junior lawyer might be quite compelling and a good use of time.
Holly Nill is an AI and productivity expert who's been inside New Zealand law firms watching them grapple with the issues as they unfold.
And I think we've had plenty of instances, generally stemming from the US, where young lawyers have opted to use precedents provided to them by ChatGPT and have been subsequently fired.
I haven't yet heard of that happening in New Zealand.
Any lawyer I've spoken with here, whether or not they're a partner, they check their precedents.
Fact verification has become mandatory for any lawyer using AI.
Even so, the productivity gains are so promising, firms worry AI could disrupt the business model on which they depend.
If you can do the work in a fraction of the time, you can only bill for a fraction of it too.
I think that the consumption model for law firms is likely to be a thing of the past.
Billing in six-minute increments is going to be harder to justify or potentially more expensive, depending on how you sell your talents.
For his part, McBride has authored an AI governance guide for his colleagues firmly embracing the technology.
Do any of your fellow lawyers think you're moving a bit too fast?
I think most of them think that.
Most of them are proceeding with caution, which is very much the way of the profession.
It's the way it's been for centuries to progress in terms of incremental change.
That's certainly the way the common law is developed.
In McBride's mind, lawyers need to adapt fast or risk irrelevance.
But the pace of change is dependent on understanding AI literacy.
And some fear New Zealand is lagging far behind.
That's Alex Funvell with that report on AI and the legal profession.
And that's just about it for this edition of World Business Report.
This on the day that the United States has pledged 2 billion for United Nations humanitarian projects next year.
That is just a fraction of what it contributed in the past, although it does remain the biggest single donor.
And a senior State Department official has called this a warning to the UN to adapt, shrink or die.
Certainly one to watch.
For now though, from me, Ed Butler and the rest of the team here in Salford.
Thanks very much for listening.
Take care.
