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Class of 2020 needs every help to survive deepest recession in history

Recessions are never normally a good time for leaving education and entering the jobs market for the first time. Unsurprisingly, it’s harder to find a job with a shorter CV while businesses are barely hiring. With the coronavirus pandemic causing the deepest recession in living memory, that task has become nigh on Herculean, writes Richard Partington.

Enter the government to make matters worse. After the downgrading of A-level grades in England this year, the hard times for school leavers are multiplied even further.

Official figures from Britain’s jobs market earlier this week showed that it is the youngest and oldest members of the workforce that are feeling the pinch as unemployment rises. Young adults are more likely to work in the hardest-hit sectors of the economy – such as hospitality, leisure and retail – making them more vulnerable to the recession.

A month earlier Boris Johnson had promised every young person in Britain an “opportunity guarantee”. The chancellor, Rishi Sunak, put some flesh on the bones of that bare statement in his “plan for jobs” summer statement. But the early evidence from companies is that they need more help to hire young people.

According to the British Chambers of Commerce, a minority of companies plan to use the chancellor’s new kickstart scheme – a £2.1bn package of support to create work placements for young people. Almost a third of businesses surveyed by the lobby group hadn’t even heard of the policy.

Given the scale of the pandemic, more needs to be done through the tax and spending system to support businesses to take on young workers. For others, it will be better to stay in education. Here, the Resolution Foundation has proposed a new maintenance support scheme to help thousands stay in education and build up their skills until the jobs market improves.

Rather than downgrading young people’s life chances, the government must upgrade its response, and make the prime minister’s opportunity guarantee more than just a soundbite.

Gloomy forecast for global economy as oil demand falls

The prognosis delivered by the International Energy Agency’s monthly oil market health check may have been poor, but at least it came as no surprise to the troubled industry, writes Jillian Ambrose.

The global oil watchdog on Thursday cut its demand forecasts for this year, and the next, as the coronavirus continues to sap demand for transport fuels. Great news for the environment, some might say, but global oil demand is also a key indicator of global economic health – and there’s no sign of a speedy recuperation.

In many ways, the IEA’s forecast offers final confirmation – if it were needed – that the global economy is in no fit state to bounce back from the pandemic.

The basis of its decision to cut next year’s oil demand forecasts by 140,000 barrels is a surge in the number of global coronavirus cases, which is likely to keep a lid on economic activity – and therefore oil demand too. By next year, demand will be 240,000 barrels a day lower than previous forecasts as global aviation falls short of its rude health of 2019.

Oil traders greeted the news with little more than a shrug, and market prices remained steady. It has already been a long year for the market, and it will take more than the now-familiar economic gloom to disturb a sluggish summer trading session.

TUI’s prospects on thin ice amid dire holiday bookings for 2021

When you have run cap in hand to the German government for another €1.2bn bailout, it’s good to promise that there will, honestly, be jam tomorrow. Travel giant TUI’s silver lining for a dire third quarter was the superficially astonishing statistic that forward bookings for 2021 are 145% higher now than they were for this Covid-blighted summer a year ago, writes Gwyn Topham.

TUI, the German tourism giant, which has already announced job cuts and store closures, posted a bottom-line net loss of 1.42bn euros ($1.7 bn) in the period from April to June.

TUI, the German tourism giant, which has already announced job cuts and store closures, posted a bottom-line net loss of €1.42bn in the period from April to June. Photograph: Tobias Schwarz/AFP/Getty Images

On closer inspection, the bad news is that this doesn’t represent huge pent-up demand. The majority of those 1.5m bookings are simply rolled over from people whose 2020 plans have been dashed by coronavirus – and, as Which? and other consumer groups have ceaselessly pointed out, have not been readily refunded.

In fact only a measly 50,000 more people than last year have got round to booking ahead – a worrying statistic, given that usually customers would be more concerned about getting their towel on a pool lounger rather than securing a future trip.

With the cash in the bank, TUI can only cut costs – such as slashing 166 UK high street stores – and hope it survives the better to dominate a battered travel market, however long that takes. As too many consumers now know, in times of pandemic, forward bookings are no longer a guarantee, for TUI’s prospects as much as their thwarted holidays.


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