1 US Fed to end stimulus in October (BBC) The Federal Reserve will end its stimulus programme in October if US economic growth continues at its current pace, minutes from its June meeting revealed. The Fed has been buying bonds to lower long-term interest rates and boost growth since September 2012. A end to stimulus efforts indicates the Fed believes the US economy can continue to grow without its support.
Currently, the bank is buying $35bn of bonds monthly. That is down from a high of $85bn in January, when the US central bank first began trimming its monthly bond purchases by $10bn a month.
Investors had been unsure about the pace of the Fed’s cuts, and had put the end of the stimulus programme at either October or mid-December. By naming an exact date, the Fed has attempted to relieve that uncertainty. Now, the speculation on Wall Street will be when the central bank will raise its short-term interest rate – known as the federal funds rate – which has been at 0% since the 2008 financial crisis, when it slashed rates to boost growth.
Critics of the bond-buying stimulus programme – which is known as “quantitative easing – have argued that by keeping rates extremely low for a long period of time, the Fed has forced investors into riskier areas like stocks or corporate debt. That has led to fears of a bubble, as the Dow Jones Industrial Average topped 17,000 points for the first time last week.
2 Lloyds to cut 500 more jobs (The Guardian) Lloyds Banking Group is to axe another 500 jobs under organisational changes in its finance and retail sections. The bank, part-owned by the taxpayer, said the cuts were part of 15,000 previously announced reductions. But the Unite union criticised the announcement, urging the bank to stop its “salami-slicing” of jobs every two months.
The cuts bring the number of jobs lost at Lloyds to around 30,000 since the banking crisis unfolded in 2008, said Unite. The bank, 24.9% owned by the taxpayer, said 175 of the job losses would be mitigated by the release of temporary agency staff and other measures.
3 Why India must revamp its labour laws (Prasanta Sahu in The Wall Street Journal) While the new Narendra Modi government is unlikely to announce big changes in the country’s strict labor laws in the national budget on Thursday, economists and executives say it needs to move quickly to loosen the laws if it wants to prompt a much-needed jump in investment and job creation.
It has been in office just over a month but Mr. Modi’s government has already shown it is ready to tweak the archaic labor laws of Asia’s third largest economy. According to discussion proposals it has placed on the labor ministry’s website, it is considering revamping regulations to allow, among other things, women to work late at night and minimum wages increases with inflation.
During the spring elections, Mr. Modi’s party, the Bharatiya Janata Party, pledged to create jobs and strive to build India into a manufacturing and export power house like China. If it wants that to happen, then India will — like China — need to create labor laws that make it easier for companies to build massive manufacturing facilities to absorb the country’s ever-expanding workforce.
India’s employment protection legislation is among the most stringent in the world. Analysts often blame it for the lack of new manufacturing jobs in India. Manufacturing only makes up around 15% of the country’s gross domestic product and has been stuck at that level for decades. In most states firms employing more than 100 people need government permission to get rid of employees or even shut down.
4 Obesity cuts longevity more than smoking does (Straits Times) That obesity can cut life short by causing strokes and other illnesses comes as no surprise, but a new study quantifies the toll: The most extreme cases cut a person’s lifespan more than cigarettes.
The analysis, published in the journal PLOS Medicine, is the largest-ever study of the effect of extreme obesity on mortality. It found that people who are extremely obese – for someone of average height, carrying an extra 45kg or more – die 6.5 to 13.7 years earlier than peers with a healthy weight.
Worldwide, nearly 30 per cent of people, or 2.1 billion, are either obese or overweight. “Overweight” is defined as having a body mass index, or weight in kilograms divided by the square of height in meters, of 25.0 to 29.9. At the low end, that is 68 kg for someone 1.65m tall. “Obesity” means a BMI of 30 or higher 82kg at 1.65m. “Extreme obesity” is a BMI of 40 or higher, or 109kg at that height.