This story about the September 2026 FOMC meeting will be updated with further details.

The Federal Reserve on Wednesday raised its benchmark interest rate for the first time in over three years amid concerns over stubborn inflation that has been driven recently by higher energy prices.

Fed policymakers voted 12-0 to raise the federal funds rate from a range of 3.5% to 3.75% to a new target rate of 3.75% to 4%. The 25-basis-point increase marks the first interest rate hike since July 2023 and comes after the Fed left rates unchanged at its first five meetings this year.

The Federal Open Market Committee (FOMC), the central bank’s panel responsible for monetary policy moves, noted that “Economic activity is expanding at a solid pace. While uncertainty remains elevated owing, in part, to geopolitical developments, domestic spending has been resilient. Productivity growth is strong, and capital investment is robust.”

“Job gains have kept pace with the workforce, and the unemployment rate has changed little. Inflation remains elevated. Today’s policy action will support a timelier return to the Committee’s 2% goal,” the FOMC added.

The FOMC’s rate hike announcement was accompanied by a summary of economic projections made by policymakers. The median member of the panel projected one more 25-basis-point rate hike this year on the so-called “dot plot” as the FOMC is set to meet again in October and December where further moves could occur.

Fed Chair Kevin Warsh will hold a press conference at 2:30 p.m. ET.

Entain, the owner of Ladbrokes and Coral, is consulting on cutting around 400 customer-service roles, mainly in the UK, out of a total of around 2,000.

The company had already cut 500 jobs this year before the latest round of redundancies. The move comes as Andy Burnham, the Prime Minister, weighs up higher taxes on slot machines, which would affect betting shops and adult gaming arcades.

Letter to the Prime Minister

Stella David, the chief executive of Entain, warned Mr Burnham in an open letter last week that hundreds of betting shops and thousands of jobs would be at risk from further tax rises.

She wrote: “You have spoken about the Makerfield Test, the principle that national policy should deliver for places and people that have too often been overlooked by Westminster.

“A substantial increase in machine games duty (MGD) would bear directly on many of the people and places the Makerfield Test is intended to support.”

According to Ms David, doubling the rate of the levy would add £100m to Entain’s annual tax bill. The standard rate of machine games duty is currently 20 per cent, according to HMRC guidance.

She added: “Independent modelling from EY shows the potential consequences across the sector, indicating that a 40pc MGD rate could lead to up to 1,470 betting shop closures and 15,900 job losses, and ultimately result in a net loss to the Exchequer of around £120m.”

Ms David said job cuts resulting from higher taxes would disproportionately affect young people and women working part-time.

She also wrote: “A further doubling of machine games duty would therefore add another significant cost to businesses already struggling to absorb major tax increases, stacking the odds against labour-intensive high-street operators and making it harder to sustain shops, jobs and investment in local communities.”

Government and industry positions

Mr Burnham and John Healey, the Chancellor, are understood to believe that slot machine venues open 24 hours a day are damaging lives and high streets.

Gordon Brown, the former Labour prime minister, is among those calling for higher taxes on gambling.

Industry leaders have warned that further tax rises on the sector would push gambling towards unregulated markets, which they say cause more harm. Other operators have made similar warnings before, with Betfred saying last year that higher gambling taxes could close 1,300 betting shops.

Rachel Reeves, the former chancellor, raised taxes on online gambling from 1 April this year, with a further levy due to take effect a year later. The changes are forecast to raise an extra £1.2bn from the sector by the start of the next decade. At the time, William Hill owner Evoke warned that thousands of jobs were at risk after the online gaming tax increase.

Hiring slowdown

The Entain cuts come against a wider fall in employment. Figures published yesterday by the Office for National Statistics showed 145,000 fewer people on payrolls in August than a year earlier. The ONS said the August estimate is provisional and likely to be revised.

Retail has recorded the largest job losses, according to the figures.

Increases to the minimum wage above inflation and a £26bn rise in employer National Insurance contributions under the current Government have been cited as factors behind the economy-wide slowdown in hiring.

CHICAGO — The Kraft Heinz Co. is innovating in its Capri Sun beverage portfolio with the launch of Capri Sun Big Pouch. The limited-edition product is roughly three times the size of a classic Capri Sun pouch, according to the company.

The supersized pouch will be available exclusively in a fruit punch flavor, and consumer response to the limited run will determine if the beverage earns a permanent spot on the brand’s line.

“Capri Sun fans have strong feelings about the pouches that shaped their childhoods, and that passion plays an important role in how we think about innovation,” said Claire Lukaszewski, associate brand director of Capri Sun. “There’s an emotional connection to this brand that spans generations, and we don’t take that for granted. We want our fans to have a meaningful role in shaping what we do and the Big Pouch is one way we’re putting that belief into practice.”

The pouches will launch at Walmart stores beginning Sept. 21 through a series of daily drops while supplies last, according to the company. 

Andy Burnham has insisted he is prepared to take “difficult decisions” on the economy, after a former Bank of England chief economist said investors were worried about his willingness to cut spending.

Andy Haldane, who has advised Burnham on the economy, claimed financial markets had grown wary of his economic plans and now considered his premiership a “traditional tax and spend socialist government”.

But the PM rejected this, adding that he would not take risks with the economy and had already made difficult choices since taking office.

It comes as recent rises to the cost of UK borrowing worsened the political options facing the government ahead of next month’s Budget.

Haldane said the prime minister was facing a “straight choice” between raising taxes and cutting spending at the yearly spending statement due on 28 October.

In an interview with LBC on Tuesday, he urged him not to raise taxes further, but said investors were questioning whether he was prepared to risk anger from Labour backbenchers by making reductions in public expenditure.

“The fiscal Achilles Heel of this government thus far has been its unwillingness and/or inability to cut public spending,” he told the radio station.

“Within financial markets, we’ve gone from the cautious optimism of the summer months to the studied scepticism of September. The market now suspects that this is a traditional tax and spend socialist government with better TikTok videos.”

Zerodha CEO Nithin Kamath reacted to the government’s newly announced Merchant Discount Rate (MDR) on select UPI transactions above Rs 2,000, saying that while it was inevitable at some point, it does not make sense for certain use cases, such as investing and broking.

The National Payments Corporation of India (NPCI) announced that the government will introduce MDR on some Person-to-Merchant (P2M) UPI transactions from October 15 onwards, with merchants paying 0.4% on transactions above Rs 2,000. Speaking to X, Kamath said the introduction of MDR was inevitable especially given how widespread UPI adoption has become.

It could also lead to more competition, instead of just three apps accounting for more than 95% of the market, he wrote. “That being said, there are some use cases, like investing and broking, where the proposed MDR structure doesn’t really make sense,” he added.

Also read | Paytm, Mobikwik, Pine Labs shares rally up to 6% after govt announces UPI fees above Rs 2,000. Why brokerages are bullish

The Zerodha CEO said the problem with broking is that there is no guarantee that money transferred to a broker will actually result in a transaction. “As brokers, we can’t force a customer to trade after transferring money. And if we can’t pass the UPI charge on to the customer, there is essentially no limit to the cost a customer can impose on a broker without generating any revenue,” he wrote.
Kamath explained this with an example. Around 10,000 customers could each make 50 UPI transfers of Rs 2 lakh in a month without executing a single trade. At the proposed MDR, this could potentially cost the broker around Rs 2 crore, without generating any business.
“What makes this even more challenging is quarterly settlement (QS). This is a SEBI regulation that requires brokers to send unused funds back to clients every month or quarter,” the Zerodha CEO wrote, adding that most customers then transfer these funds back to their broking accounts, with more than 50% of these transfers happening through UPI.
So regulation essentially forces this movement of money every month or quarter, and the broker could end up bearing the cost when the money comes back, without any incremental benefit or revenue, he said.

Also read |Yes Bank shares jump 4% as Citi, Morgan Stanley see lender as key beneficiary of new UPI charges. Earnings boost ahead?

Can Zerodha continue zero brokerage charges after new UPI fees?

Nithin Kamath highlighted that Zerodha currently doesn’t charge brokerage on equity delivery trades because the economics allow them to offer them for free. “But if every UPI transfer starts carrying an additional cost, irrespective of whether the customer actually trades, I don’t see how we can absorb this indefinitely,” he wrote.

While Kamath believes having an MDR is okay, he feel it still doesn’t solve the problem of customers transferring money without transacting, but something like 0.02% with a cap of Rs 5 or Rs 10 per transaction seems much more reasonable for broking, instead of a cap as high as Rs 300.

New charges on UPI transactions

It is important to note that consumers will not be charged for making UPI payments, while Person-to-Person (P2P) transfers will also remain free. Small merchants classified under the P2PM framework, including vendors receiving up to Rs 1 lakh a month through UPI QR codes, will continue to be protected from MDR.

Transactions worth up to Rs 2,000 will continue to carry zero charges and account for more than 95% of UPI’s P2M transaction volume, according to the FAQ released by the government. The NPCI clarified that MDR will be borne by merchants and cannot be passed on to customers. This implies that consumers will continue to pay the listed price when using UPI, with no separate transaction or platform fee imposed by UPI apps.

Also read | Mutual funds, stocks UPI payments to attract 0.02% MDR under new NPCI framework

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

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