Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

Hold tight to your free weights — the Ozempic revolution is coming to a gym near you.

The runaway success of “GLP-1” weight loss and diabetes drugs, which also include Wegovy and Zepbound, is hard to overstate. Sales are expected to approach $50bn this year, making them the top-selling class of drugs worldwide. That is despite global shortages, high prices and the fact that the drugs are largely available only in injectable form so far. Sales are expected to more than double to $130bn by 2030 and could soar higher if the makers win permission to sell them as a preventive tool.

For pharma groups Novo Nordisk and Eli Lilly, soon to be joined by others, this is fabulous news. For others, it is likely to be really bad. Diet company WeightWatchers recently changed chief executives as it struggles to adjust, and soft drink, beer and snack company shares have been on a wild ride as investors try to figure out who will be hurt the most when consumers taking the drugs eat healthier food and fewer calories overall.

For gyms and health clubs, the impact is going to be huge but complicated for an industry that is still rebuilding after Covid. The pandemic put a quarter of US fitness centres out of business and reshaped commuting and exercise patterns. Weight-loss drugs are likely to supercharge a consumer rush towards strength training equipment that has been gaining force for more than a decade, and many gyms are still ill-prepared.

Ten years ago, most health club floors were seas of treadmills, elliptical machines and stationary bikes, with fixed weight machines along the edges along with a free weight area geared towards power lifting, mostly by men. But the pandemic and concurrent rise of apps and YouTube videos that gave people access to personalised fitness routines has made that configuration all but obsolete.

Customers still use treadmills but both sexes now seek out a wider range of strength training equipment, including barbells, dumbbells, medicine balls and the like. Clubs, seeking to boost membership, have also leaned into the social aspects of in-person fitness, from group classes and personal trainers to cafés and hang-out areas.

Gyms are pushing their stair climbers and fixed weight machines to the periphery and replacing them with open space for body-sculpting classes, free weights and individual training sessions.

“We’re seeing a greater demand for space for strength,” Colleen Keating, CEO of Planet Fitness, one of the largest listed gym groups, told analysts in August. Even Peloton, famous for its cardio-intensive bikes, is testing an app focused on strength training.

The shift takes time and money. The now less-popular cardio machines are often sold on multiyear leases, while strength training equipment generally requires an upfront investment. The delay is leading to uneven usage and customer complaints at clubs that have not made the shift.

Weight-loss drugs will exacerbate the pressure. As the drugs gain acceptance, fewer people are likely to rely on exercise as their primary weight loss tool and the drugs’ side effects, nausea and intestinal distress, can make high-impact cardio activities uncomfortable.

However, GLP-1 users still need the gym. Studies suggest that the drugs cause significant muscle loss along with fat, leading to problems with balance and mobility as well as saggy skin sometimes dubbed “Ozempic butt”.

Strength training seems to be the answer not just for GLP-1 users but everyone else. A growing body of medical literature suggests strength training cuts mortality, particularly for women, while also helping to prevent osteoporosis and relieving the symptoms of depression.

“It’s gone from being health and fitness to health and wellness, which is a lot more holistic” says Eleanor Scott, a partner on PwC’s leisure strategy team.

Foot traffic to popular US gym chains Crunch Fitness and EoS Fitness is up by double-digits year on year, according to data provider Plaicer.ai. Planet Fitness has added 2.7mn members since the start of 2023 and improved its profit margins.

For all of them, the combination of strength training with prevention creates a chance to win, or win back, older customers still wary of gyms post-Covid. Although 80 per cent of baby boomers participate in fitness activities, just 42 per cent belong to a gym, compared to nearly three-quarters of active Gen Zers and millennials, according to ABC Fitness. But growth will not follow if newcomers end up fighting the regulars for access to the dumbbells.

brooke.masters@ft.com

Follow Brooke Masters with myFT and on X

Ajesh Kumar, a college graduate in a village in Haryana, a rural state bordering Delhi, recently applied to work as a cleaner. But there were more than 400,000 jobseekers for an estimated 5,000 positions, making the 30-year old’s chances about one in 80. 

“There’s just no hope, no chance” of getting one of the government posts, Kumar said, which are prized because of the guaranteed hours, wages and benefits, however low, of public sector work. Among the applicants were two of his family members.

Kumar is one face of India’s most intractable public policy issue: a chronic shortage of formal jobs in the world’s most populous country and, according to companies, a corresponding shortage of suitable candidates to fill them.

Prime Minister Narendra Modi’s economic record will again be on the agenda in Haryana on Saturday in one in a string of regional polls in which the opposition will seek to build momentum against his Bharatiya Janata party. The opposition managed to push the BJP into a parliamentary minority for the first time since 2014 in nationwide elections this year, in part by highlighting persistently high joblessness.

India’s economy is failing to create enough jobs for its young and growing population and train the skilled workers its companies need to harness that demographic dividend. This mismatch is feeding widespread grievances and represents one of the biggest challenges for Modi as he enters his second decade in power.

“Every month about a million formal job seekers are being added to the workforce,” says Rituparna Chakraborty, co-founder of Teamlease, which describes itself as India’s biggest staffing company. “Nine out of 10 of them go into the informal sector — jobs where there is no employment contract, no social security benefits, no protection, and no wage guarantees.” 

“The poorest Indians tend to take on daily wage jobs in things like construction because there aren’t too many alternatives,” says Shruti Rajagopalan, senior research fellow at the Mercatus Center at George Mason University, in Virginia.

“The people in the middle are still waiting, and would rather hold out for a government job, or work on the family farm because at least it provides them food security.” 

Modi’s government has taken steps to tackle India’s joblessness. In the first post-election budget, finance minister Nirmala Sitharaman announced an apprenticeship scheme aimed at benefiting 10mn young people over five years. The government has also promised training subsidies for companies, stipends for apprenticeships and help for vocational schools to amend their curricula to align with job market demands. 

In its previous term, Modi’s cabinet also cut corporate taxes and took steps to amend labour laws in a bid to stimulate job growth.

Corporate India, however, laments a shortage of qualified candidates for its top jobs. Conglomerate Larsen & Toubro said in June that it faced a shortage of 45,000 skilled labourers and engineers across its businesses, which range from construction to information technology.

Analysts said the skills gap bodes ill for Modi’s “Make in India” manufacturing push, and attests to neglect and uneven standards at Indian secondary institutions.

“So many people come out of these colleges, but we can do a lot to make them more employable in the industry,” K Krithivasan, chief executive of Tata Consultancy Services, India’s biggest IT company, told the Financial Times earlier this year. 

Mohandas Pai, chair of private equity firm Aarin Capital and former chief financial officer at IT giant Infosys, said most industries were struggling to find skilled workers as India’s economy expands at an annual clip of about 7 per cent, with job openings outpacing the supply of employable workers.

At the same time, he said: “Many industries are not willing to spend money to hire them, skill them and train them.” 

A study published this year by Quess Corp, an Indian business service provider, and the Federation of Indian Chambers of Commerce and Industry argued that India faced a wage — rather than an employment — problem. About 80 per cent of jobs pay less than Rs20,000 ($238) a month, not enough to meet rising living expenses, the study’s authors argued. 

On the supply side, economists say cumbersome labour regulation is also holding back industry from creating jobs. Much of the legislation only kicks in for companies employing 10 people or more, points out George Mason University’s Rajagopalan. “Either people are not hiring the 10th worker, or they hire the worker informally,” she said.

Modi’s government in 2020 approved an overhaul of India’s patchwork of labour laws, which regulate areas ranging from maximum shift hours to the number of clocks per factory floor. But the reforms have yet to take effect. 

There is even disagreement over how to measure India’s unemployment. The Centre for Monitoring Indian Economy, a think-tank, publishes the most widely cited indicator, which is conducted monthly. In August, it showed a jobless rate at 8.51 per cent, and unemployment on a rising trend. 

“This is a pretty high unemployment rate in a country growing at 7 to 8 per cent per annum,” says Mahesh Vyas, CMIE’s managing director. “We have also been seeing the unemployment rate very high for a long period now in both rural and urban regions.” 

Modi’s political circle favours the Periodic Labour Force Survey, which reports quarterly rural and urban unemployment rates and shows the jobless rate at below 5 per cent and falling.

Analysts said the discrepancy was because of what counted as work, including part-time agricultural work.

Vyas claims the definition of a job in the PLFS is “too relaxed”. He also pointed to growth of India’s net fixed assets at companies, which he said served as a proxy for employment and joblessness and has been growing at only about 5-6 per cent in recent years.

“Employment will increase only if investments increase, and I don’t see that,” Vyas said.

Kumar, in Haryana, for example, might or might not qualify as unemployed depending on who is counting. He is earning some money on commission for a company that sells cattle feed, and is considering setting up a dairy business with his brother.

Like many young Indians, he also aspired to an army post, completing a correspondence degree in political science and passing the written test three times. But he was rejected in the interview.

“You need sources and contacts when you reach that level,” Kumar said. “I did not have them.”

“I have given up looking for jobs,” he added.

There’s no escaping artificial intelligence (AI), with many new solutions on the market for advisers.

But among the myriad messages, it’s rarely clear what type of AI is being promoted and whether it is suited to your needs.

There are two main types of AI today and it’s important to distinguish which one is being offered to you.

Before you commit, you must really consider what you want the tech to do for you.

Predictive AI

Often considered ‘traditional’ AI, this class of machine learning is trained to recognise patterns in data, text or speech.

Humans (data-annotation specialists) manually mark up data records with what they mean, and data scientists feed this training data into a ‘model’ – a statistical engine they have designed, usually based on some form of neural network technology.

Generative AI is only useful when a human is iteratively interacting and checking every response

This model is then used on new, previously unseen, data to predict what it should be labelled as.

Predictive AI can be used to distinguish whether a picture is a cat or a dog, or if a sentence concerns a client’s financial objectives, their emergency funds or their attitude to risk.

It can be made very accurate and, more importantly, it can be tested as to its accuracy. Its results are repeatable and any biases in its training can be removed.

In short, predictive AI is very good if the time is taken to train it well.

Generative AI

This is the ‘new’ AI – like ChatGPT, or at least the underlying GPT models from OpenAI, Facebook, Mistral, Baidu, Anthropic, Google and others.

You’ll often see these models described as large language models – or LLMs – although that’s a misused coinage, as there are many LLMs in the predictive AI family.

When buying any AI product, be explicit about what you want it for and ask each vendor to explain why their method is best suited to that

The clue to the purpose of generative AI is in the name. This class of AI is designed to generate new data, such as pictures, prose or speech.

It has no capability to understand or analyse your data, merely creating new content based on instructions or prompts. For example, if given an instruction like ‘draw me a parrot’ or ‘write a poem about the sea’ it will do so.

In simple terms, it does this by generating a likely start word from a limited random selection, picking a good next word that is statistically likely, then a third word and so on.

It doesn’t know what it is saying. It simply churns out a sequence of words statistically related to the prompt provided, based on what it has seen before – the data the GPT vendors have trained it on, mostly large portions of the internet.

So, generative AI is good at creating content, whereas predictive AI is good at identifying content.

The confusion

Many vendors are promoting generative AI that appears to understand or identify content.

In reality, they are first performing a simple search into your content to try and find relevant information, then using the first few search results within their GPT query prompt in order to formulate an answer.

It’s rarely clear what type of AI is being promoted and whether it is suited to your needs

Vendors use generative AI as a shortcut to painstakingly labelling data and training a predictive AI model suited to your needs.

The problem with this is that the search request itself is automatically generated, then only a handful of findings are used in generating an answer. The answer is then based on the standard GPT method of statistically generating one word at a time.

That’s plenty of opportunities for errors to creep in, inconsistencies to arise and even hallucinations to appear. In short, you can’t rely on the outcomes (not verified by a human) if you want to use this information for any kind of decision making.

Generative AI is only useful when a human is iteratively interacting and checking every response, such as in a chat or search application.

If you need reliable AI that will consistently identify relevant content or what it means, there is no shortcut to using predictive AI, especially if you want to limit the need for humans to check every answer.

When buying any AI product, be explicit about what you want to use it for and ensure you ask each vendor to explain why their chosen method is best suited to that and, most importantly, how they can guarantee its accuracy and data reliability.

Joe Norburn is chief executive at TCC Group and Recordsure

Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

Israeli forces bombarded Beirut and southern Lebanon overnight as the region braced for Israel’s response to a missile attack by Iran that intensified fears of a wider war in the Middle East.

Prime Minister Benjamin Netanyahu vowed retaliation against Tehran after dozens of missiles were fired into Israel. “Iran made a big mistake — and it will pay for it,” Netanyahu said on Tuesday. “Whoever attacks us, we will attack them.”

The surprise missile attack by Iran has brought the region even closer to an all-out conflict as Israel continues its offensive against Iran’s proxies. In recent weeks, Israel has hit a Houthi-controlled port in Yemen, carried out mass air strikes against Hizbollah and has been blamed for explosions in Syria.

The US pledged to join Israel in exacting “severe consequences” from Iran for its missile barrage, said White House national security adviser Jake Sullivan.

Only a handful of the Iranian missiles slipped past Israel’s sophisticated air defences, including one that appeared to have struck near the headquarters of the Mossad, Israel’s foreign intelligence service.

One death was reported in the Palestinian city of Jericho, where a man was struck by debris from an intercepted missile.

A person briefed on the situation said Iran had targeted military and intelligence infrastructure near Tel Aviv and other facilities elsewhere in the country.

Iran said the strikes were retaliation for Israel’s targeted killings across the region, including that of Hizbollah chief Hassan Nasrallah last week, and threatened to respond if Israel retaliated.

“Our action is concluded unless the Israeli regime decides to invite further retaliation. In that scenario, our response will be stronger and more powerful,” Iranian foreign minister Abbas Araqchi said in a post on X on Wednesday.

Araqchi said he had spoken to his UK, German, and French counterparts, warning that while Iran did not seek war, it was “not afraid of it.” He also urged “any third party” to refrain from intervening, a clear reference to the US.

German chancellor Olaf Scholz condemned Iran’s missile attack on Israel in a statement on Wednesday, saying Iran risked “setting the whole region on fire”. “We must prevent that at all costs,” he said. “Hezbollah and Iran must immediately stop their attacks on Israel.”

Israeli warplanes carried out heavy bombardments in Beirut and southern Lebanon on Tuesday night.

The air strikes came after Israel issued new evacuation orders for the area, which is largely empty after days of intensive strikes that have flattened residential buildings in densely populated neighbourhoods.

The depth of Israel’s ground incursion into Lebanon remained unclear more than a day after the Israel Defense Forces said they were conducting targeted raids just across its northern border.

The IDF said it was sending additional forces to join what it says are “limited, localized, targeted raids” into Lebanese territory, including troops from the Golani infantry brigade and a separate armoured brigade.

Israeli troops have been conducting covert raids into the area for nearly a year since hostilities began against Hizbollah in the wake of Hamas’s October 7 attack on southern Israel.

In the first sign of contact between Israeli forces and Hizbollah, the Iran-backed militant group said its fighters had repelled a group of Israeli troops “trying to penetrate” the southern community of Odeisseh, close to the border. The IDF did not comment on the claim.

Israeli warplanes struck targets in southern Beirut, saying they had killed the head of Hizbollah’s operations for the Syrian city of Aleppo, where the Lebanese group had come to the aid of President Bashar al-Assad in the Syrian civil war.

That specific division of Hizbollah was behind drone and anti-tank missile attacks on Israeli territory, including on a school in Eilat in 2023, the IDF said.

It said separately that it had killed Muhammad Jaafar Qasir, a commander in charge of weapons transfers from Iran and its affiliates.

Nearly 2,000 people have been killed and thousands more wounded in Lebanon in almost a year of fighting between Israel and Hizbollah, Lebanese authorities said.

Most of those have been in the past two weeks. There were 55 dead and 156 wounded in Israeli attacks across Lebanon on Tuesday.

In oil markets, the international benchmark Brent crude edged up 1.4 per cent to $74.55 a barrel on Wednesday, while the US benchmark West Texas Intermediate climbed 1.5 per cent to $70.9 a barrel.

Prices had risen as much as 5 per cent after the Iranian attack on Tuesday night.

Additional reporting by William Sandlund in Hong Kong

Good morning. Iran fired around 180 missiles at Israel last night in response to the country’s ground invasion of Lebanon, in a significant esacalation that puts the Middle East on the brink of an all-out war.

Here, I preview the tepid welcome Britain’s prime minister could expect to receive today as he tours the Brussels leadership in an attempt to “reset” relations, and Laura reports on the slow progress towards swearing in the new commission.

Cherry-picking

Sir Keir Starmer comes to Brussels today for talks with EU officials on his proposed “reset” of relations with the UK, with European Commission president Ursula von der Leyen under strict orders from capitals not to let the British prime minister pick and choose what to focus on.

Context: The UK left the EU in 2020 after a slim majority of Brits voted to exit the bloc in a 2016 referendum. Four years of tortuous negotiations over the terms of the separation left much to be desired.

Starmer has pledged to improve the relationship, but has been vague about the key details of his proposals. At a meeting of member state ambassadors this week, some told von der Leyen’s representative not to allow Starmer to “cherry-pick” what he wants from Brussels, and not talk about the stuff the EU wants from him.

Some warned that the commission must be cautious about any new initiatives, pointing out that the UK had been clear on its “red lines” around issues they were unwilling to discuss, people briefed on the talks said.

Starmer has said he wants to “deliver ambitious and improved co-operation with EU leaders”, without specifying what that could entail.

“I am so determined to put the Brexit years behind us and establish a more pragmatic and mature relationship with the European Union,” he said yesterday, while ruling out a return to the bloc’s single market, customs union or rules allowing freedom of movement.

The EU wants to talk about fisheries and youth mobility, while the UK would rather focus on security and defence, migration and health issues, according to officials briefed on the preparations.

Aside from talks with von der Leyen, Starmer will also meet European Council president Charles Michel — who represents the bloc’s 27 national leaders — and European parliament president Roberta Metsola.

Officials on both sides of the English Channel mainly think that the symbolism of the meetings will be more important than any of the nitty-gritty discussed during them — if indeed there’s any at all.

Chart du jour: The price is right

Eurozone inflation has dropped below the European Central Bank’s 2 per cent target for the first time in three years, bolstering expectations of an interest rate cut at its next meeting.

Over by Christmas?

The new European Commission probably won’t start working before December at the earliest, as the European parliament takes its time to organise confirmation hearings for the new commissioners, writes Laura Dubois.

Context: After her re-election as commission president, Ursula von der Leyen has picked a team of 26 commissioners to form her next college. The candidates now need to be approved by parliament in a series of hearings, followed by a plenary vote on the entire slate.

Von der Leyen’s European People’s party (EPP) had been keen to get going and hold hearings this month. But that looks unlikely: At a meeting of the heads of the parliamentary committees who will hold the hearings, a majority were in favour of starting on November 4 — meaning the new commission would not take off before December.

The heads of the political groups will take a final decision this afternoon, but officials believe an October option is probably unviable.

While it might be hard to explain to ordinary citizens why the EU institutions are still not reconstituted almost four months after the elections, the committees say they need more time to vet the candidates.

Before committee hearings can start, all commissioners need to answer written questions on topics including their “personal qualifications”, how they would promote “gender mainstreaming” and how they will involve parliament in the legislative process, according to a draft seen by the FT.

The questions, and which committee will grill which candidate, will also be finalised by the party presidents today. It is still unclear when the exact order of the hours-long hearings is likely to be fixed; one parliament official said it would be decided next week.

Candidates also need to be vetted for potential conflicts of interest.

Historically, some heads always roll: In 2019, the parliament’s legal affairs committee rejected Romania’s and Hungary’s appointees over conflicts of interest before hearings even began.

If member states take their time to replace unwanted candidates, the commission start could be pushed even further.

What to watch today

1. German Chancellor Olaf Scholz hosts French President Emmanuel Macron in Berlin.

2. UK Prime Minister Sir Keir Starmer meets senior EU officials in Brussels.

Now read these