PM for pushing reforms, jobs and investment

Set to begin a new term in office, Prime Minister Manmohan Singh on Tuesday spoke of the need for reforms and reverse the slowing down of investment and employment generation caused by global economic slowdown.

Shortly after he was elected leader of the Congress Parliamentary Party paving way for him to become the Prime Minister for the second term, Singh said, "There is some slowing down of investment and employment generation. We have to reverse this. We have to revive growth and make it even more inclusive."

The Prime Minister said sustaining growth requires new investment and better management of government finances. This also "requires reform of the economy... Revitalisation of agriculture and acceleration of industrial development".

After growing by an average annual nine per cent for the last four years, the Indian economy came under pressure of the global meltdown and expanded at a slower pace of around seven per cent in 2008-09.

"...The global economic slowdown has hurt us.," Singh said. He said he would ask every minister to set time-bound targets for implementation of the election promises of the Congress Party and policies of the each ministry. "We will undertake quarterly review of the programme implementation by each ministry," he said.

The savings and investment rates have to be kept high to remain globally competitive in the face of economic challenges, he said.

Pound strengthens against dollar

The pound has strengthened against the dollar, after Bank of England minutes revealed that policymakers considered boosting money supplies.

The prospect of the move, which could encourage lending - stimulating the economy - boosted sterling.

By Wednesday afternoon, one pound could buy $1.5514, up from Tuesday's close of $1.5350. A day earlier, sterling had reached a five-month high of $1.5525.

The dollar was also weaker against both the euro and the yen.

At noon, the euro was trading at 88.16p.

Meanwhile, the yen was hit by the announcement that the Japanese economy had shrunk by more than 4% in the first quarter of 2009.

With analysts seeing indications of economic recovery, there are signs that investors are moving away from the greenback, often deemed a safe haven.

In January, the pound hit a 23-year low of $1.35 against the dollar.

Last July, the pound was worth more than $2 but its value plunged as signs emerged over the degree of the downturn in the UK.

The May minutes also showed members had unanimously voted in favour of keeping interest rate unchanged at 0.5%.

The Bank of England's minutes showed the bank was open to increasing its quantitative easing plan by the maximum £75bn permitted, which would help encourage lending.

Oil prices rise to six-month high

Oil prices have hit six-month highs, breaking through $60 a barrel as investors wait for key US inventory figures later on Wednesday.

US light crude rose to $60.70 a barrel, while London Brent climbed to $59.18.

US crude slipped below $60 on Tuesday, dragged lower by official data showing a record fall in the number of new homes built in the US.

Investors are hoping to see a fall in US inventories that would indicate an increase in demand for oil.

But some analysts believe the price will climb, even if inventories rise.

"I expect the market to push higher even if there's a build in the inventories, just because that's where the momentum is," said Jonathan Kornafel at Hudson Capital Energy.

Oil prices have risen from $50 a barrel over the last three weeks, as optimism about the state of the world economy has grown.

And it has jumped from $32 levels seen in January, though remains well below the record high of $147 touched last July.