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

The US economy added 254,000 jobs in September, far outstripping expectations, in a sign of the labour market’s resilience as the Federal Reserve considers how rapidly to cut interest rates.

The figure from the Bureau of Labor Statistics was above expectations of economists polled by Reuters of 140,000 and compared with an upwardly revised gain of 159,000 jobs in August.

The unemployment rate fell to 4.1 per cent, having come close to a three-year high in July at 4.3 per cent.

The report suggests the Fed is on course to pull off a so-called soft landing for the US economy, which has weathered the worst period of high inflation in a generation while maintaining robust growth and strong employment.

The Fed last month cut its benchmark interest rate by half a percentage point to pre-empt any significant weakening of the labour market. 

After Friday’s data release, investors in futures markets scaled back predictions that the Fed would cut interest rates by another half percentage point at its next policy meeting in November.

Futures markets were pricing in a 94 per cent chance of a smaller quarter-point cut, compared with about 65 per cent shortly before the data was released.

“These numbers are a bit of a game-changer,” said Josh Hirt, senior US economist at Vanguard. “When you look at the revisions too, this changes the narrative about the underlying pace of job growth . . . overall it’s very positive.”

Treasury yields jumped shortly after the data was published. The two-year Treasury yield, which is sensitive to interest rate expectations, rose 0.15 percentage points to a one month high of 3.86 per cent. Futures markets suggested the S&P 500 was poised to open 0.9 per cent higher.

The dollar climbed 0.5 per cent against a basket of rival currencies following the data. It has risen more than 2 per cent since last Friday, putting it on course for its strongest week in more than two years.

“The market likes cuts but it doesn’t like them if they’re because of real weakness in the economy and worries about recession,” Hirt said. “It likes cuts with a positive underlying economy, which would bolster the soft landing scenario.”

Jobs growth in Friday’s report was strongest across the leisure and hospitality sector, specifically in restaurants and bars. Employment in those categories increased by almost 70,000. Healthcare jobs rose by 45,000.

Manufacturing and other industrial jobs such as in mining and oil were unchanged for the month, alongside the retail, transportation and professional and business services sectors.

Average hourly earnings increased 0.4 per cent for the month and are up 4 per cent on an annual basis.

US central bank officials are focused on the health of the labour market as they plan further interest rate cuts in the coming months after making a larger-than-usual half-point reduction in September. The cut left the Fed’s benchmark rate at 4.75-5 per cent.

Fed chair Jay Powell hinted this week that the central bank would revert to its more usual quarter-point cut when it next meets in November — just after the US presidential election — as long as the economy does not deteriorate unexpectedly.

Officials have grown more confident in their ability to bring price pressures back down to the Fed’s 2 per cent target without triggering a recession. Lay-offs have not yet risen, although some economists warn that the fall in demand in recent months could be a precursor to steeper job losses.

New data on Tuesday showed that the number of vacancies unexpectedly rose in August to 8mn, but the rate at which Americans are quitting their jobs fell to the lowest level since June 2020.

The unemployment rate is up substantially from its recent low of 3.4 per cent last year, but economists largely attributed the rise to a growing workforce.

Most Fed policymakers last month forecast that the US unemployment rate would peak at 4.4 per cent this year and next, while interest rates would fall to 4.25-4.5 per cent and 3.25-3.5 per cent, respectively.

TESCO has issued an urgent recall urging consumers not to buy certain mince pies because they could contain glue.

The product affected is the six pack of Tesco Finest 6 All Butter Pastry Mince Pies.

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Packets with the following best before dates should not be eaten: October 4, October 26, November 2, and November 10.

The Food Standards Agency put the alert up on Thursday warning customers that the baked goods may contain pieces of dried glue from the packaging, making them “unsafe to eat”.

The agency advises customers who have bought the product not to eat it but to return it to any store for a full refund – no receipt is required.

If customers run into any further issues they have been urged to call the Tesco Customer Service line on 0800 50 5555.

The supermarket has reassured customers that no other products have been affected by this issue.

A spokesperson for Tesco said the recall was a “precautionary measure”.

They added:“The quality of our products is our number one priority and we immediately began an investigation with our supplier to understand what happened. We’re sorry for the inconvenience”.

However, if you suspect someone has swallowed glue, the NHS recommends calling 111 for advice.

If the person is showing signs of serious illness, such as loss of consciousness, seizures, or drowsiness, you should call 999 to request an ambulance or take them to the A&E department.

Tesco’s recall follows Marks & Spencer’s announcement yesterday that its butternut squash soup,  with a use-by date of 6.10.2024 and barcode 0041142, may contain pieces of metal.

The UK supermarket warned its customers that due to the possible contamination the soup was “unsafe to eat”.

In a similar course of events, Farmfoods, another popular UK supermarket, issued a “do not eat” alert on 20 September over some chicken nuggets.

The frozen food brand said undeclared ingredients could put some at risk of dangerous allergic reactions.

As a general rule, if a recall involves a branded product, the manufacturer would usually have lead responsibility for the recall action.

Product recalls are an important means of protecting consumers from dangerous goods.

Many safety notices are issued as a precautionary measure, letting consumers know an item may be dangerous.

In more serious cases like this one, retailers issue a recall, warning customers not to use the product and asking them to return it.

Usually, if a recall involves a branded product, the manufacturer will be responsible for the recall action.

But it’s often left up to retailers to notify customers when products could put them at risk.

A company will sometimes issue a recall to limit the number of complaints.

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

Some of the UK’s largest wealth managers have warned chancellor Rachel Reeves that people are pulling money out of their pensions early because of “uncertainty” over potential tax changes in the Budget.

Wealth manager Quilter and investment platforms AJ Bell and Hargreaves Lansdown are among the companies highlighting that an increasing number of people are considering withdrawing from their pension pots over speculation that the government could dilute pension tax relief.

Steven Levin, chief executive of Quilter, which manages £113bn, sent a letter to the Treasury on Wednesday to flag that the wealth manager was “experiencing a significant increase in calls from customers wanting to adjust their retirement plans”.

He said this was “a direct result of the recent Budget warning, which indicated ‘painful’ changes to taxation but left a gap in information other than ruling out changes to major taxes”.

The Quilter letter added: “The knock-on uncertainty around changes to pension tax reliefs, tax-free cash and possible amendments to pension contributions is causing anxiety and confusion for those trying to plan their financial futures.”

Investment experts have warned of a potential tax raid on pensions in this month’s Budget as the UK government seeks to close a £22bn hole that it has identified in the public finances.

Individuals can currently access 25 per cent of their pensions tax-free up to a cap of £268,275 from the age of 55. The Fabian Society, a left-wing think-tank, has urged the government to drop the tax-free limit to £100,000.

But once the tax-free lump sum has been withdrawn, money cannot be put back in — sparking concern among financial advisers and wealth managers.

AJ Bell, one of the UK’s largest investment sites, told the Financial Times it was also sending a letter to the Treasury on the issue. AJ Bell said it had warned the Treasury it was concerned that customers were making decisions on their pensions based on speculation and uncertainty.

“Once you’ve taken your tax-free cash you can’t put the toothpaste back in the tube and, assuming the chancellor doesn’t pursue a disastrous raid on tax-free cash, those people may find they’re in a worse position long term,” said Tom Selby, public policy director at AJ Bell. “The chancellor should use her inaugural Budget to publicly commit to a pact on pension taxation.”

One of the UK’s largest workplace pension providers, which declined to be named, said it had also seen “an increase in tax-free cash withdrawals”. 

Another source in the industry said the volume of inquiries about pension withdrawals was similar to the surge in questions about personal finance issues experienced at the tax year-end in April.

Pension providers including insurance groups Aviva, Royal London and Standard Life, and wealth managers including Evelyn Partners have experienced a surge in inquiries from individuals considering taking their tax-free lump sums ahead of the Budget, in case the government reduces this limit, according to people familiar with the matter.

Of all potential budget measures, “this is certainly one of the main areas causing anxiety”, said Jason Hollands, managing director at Evelyn Partners. He said there was a “spike in inquiries and conversations” from concerned clients about the issue.

Quilter’s Levin said the current uncertainty was “driving knee-jerk decisions” that could jeopardise long-term financial security.

“Our financial planners are receiving calls from anxious clients, many of whom are at risk of making hasty adjustments to their retirement plans without fully understanding the potential consequences.”

The government could also decrease the maximum amount individuals can contribute to their pensions each year without incurring a tax charge, which was increased from £40,000 to £60,000 in April last year. 

The Treasury declined to comment. 

Advice firms need to get the balance right between adopting technology and making sure it does not end up costing their clients more, Aberdein Considine Wealth chief executive Jen Paice has warned.

Speaking on a panel at the Lang Cat’s HomeGame 4 event in Edinburgh yesterday (3 October), Paice said firms need to consider the impact on the client.

“At some point, it may end up costing them more, and that’s my concern,” she said.

“We want to deliver better services but also reach more people and, for that, we need technology.

“It’s a fine balance between adopting technology and making sure it doesn’t end up costing the client more.”

She said there is a lot of talk about how technology should reduce costs, but “there’s a concern it might have the opposite effect.”

“For example,” she added, “we are a fixed-fee financial planning firm, so it’s essential for me to be as efficient as possible if I want the business to be more profitable.

“My view on technology is that it should give me more time to think and, ultimately, it’s that thinking time from a chartered financial planner that clients are paying for.”

On the same panel, FNZ group head of UK, Middle East and Africa, Alastair Conway, said technology should remove friction and reduce costs.

“As long as advisers are delivering extra value or cost reductions to clients as a result of using technology, I think it’s fine,” he said.

“In my experience, most advisers have used technology for the benefit of their clients, which is how it should be.”

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He suggested that, as things evolve, advisers should be able to spend less time on administrative tasks, like filling in forms, and more time on valuable interactions.

“The real value of advisers, from my experience, is the unique ‘magic’ that happens when they sit down with an investor and do what only they can do,” he added.

“While 90% of what advisers do may be broadly the same, it’s the 10% difference that sets them apart and allows great firms to flourish.

“This can be achieved at scale or within smaller firms, and that’s where technology plays a crucial role.”