21/02/2026

BIZ & FINANCE SATURDAY | FEB 21, 2026

14 UK youth jobs crisis tests wage pledge

NEW DELHI: Fledgling Indian artificial intelligence (AI) firms showcased homegrown technologies this week at a major summit in New Delhi, underpinning big dreams of becoming a global AI power. But analysts said the country was unlikely to have a “DeepSeek moment” – the sort of boom China had last year with a high performance, low-cost chatbot – any time soon. Still, building custom AI tools could bring benefits to the world’s most populous nation. At the AI Impact Summit, Prime Minister Narendra Modi lauded three new models released by Indian companies, along with other examples of the country’s rising profile in the field. “All the solutions that have been presented here demonstrate the power of ‘Made in India’ and India’s innovative qualities,“ Modi said Thursday. One of the startups making a buzz at the five-day summit attended by world leaders and top technology CEOs was Sarvam AI, which this week released two large language models it says were trained from scratch in India. Its models are optimised to work across 22 Indian languages, says the company, which received government-subsidised access to advanced computer processors. The five-day summit, which wrapped up yesterday, is the fourth annual international meeting to discuss the risks and rewards of the LONDON: The rise in Britain’s youth unemployment rate to a 10-year high is posing tough questions for the country’s centre-left government about its policy of phasing out a lower minimum wage for younger workers. Official figures this week showed Britain’s jobless rate for people aged 16 24 rose to 16.1% in the final quarter of last year, up from 13.8% in the middle of 2025 and a record low of under 9.2% during the Covid-19 pandemic. Youth unemployment in Britain now exceeds that in the eurozone. Many business groups and economists blame a sharp increase in the minimum wage alongside last April’s increase in employer social security charges and broader economic headwinds, while the impact from greater use of artificial intelligence remains harder to prove. Jack Kennedy, senior economist at job site Indeed, said vacancies for jobs paying close to the minimum wage in Britain had fallen more sharply than those for higher-paid roles over the past three years – the opposite trend to Germany or France. “The UK really stands out in terms of the weakening that we’ve seen in lower-paid job postings,” Kennedy said. “That does definitely illustrate the extent to which low-wage postings in the UK have been hit by policy changes: the National Insurance increase, the minimum wage increases, and so forth.” Ben Caswell, senior economist at the National Institute of Economic and Social Research, said official data

o Minimum pay hikes, tax costs and weak hiring blamed as unemployment rate among younger workers hits decade high

same period and is due to increase to £10.85 in April. Approaches to youth minimum wage rates vary widely across Europe. France, which has a high minimum wage similar to Britain’s, does not lower it for younger workers except in certain training roles, while the Netherlands pays 18-year-olds half the hourly rate of those three years older. Gareth Jones, managing director of In-Comm Training Services, said manufacturing and engineering firms, especially smaller ones, were becoming more reluctant to hire apprentices. “There’s a lot of narrative around employers saying: ‘Why would we pay someone that’s completely unskilled that wage when we can get semi skilled for the same or not too much more?,’” Jones said. For young people, finding work is often tough. Alex Kelly, a 19-year-old film student, works at the bar of a working men’s club in southeast London near his family home, where he started washing glasses at the age of 16. But the job does not offer reliable hours and he has not been able to find other work that fits around his studies. “The applying process is really awful. If you do it online, then most of don’t expect India to emerge as a frontier AI innovation hub in the near term,“ said Reema Bhattacharya, head of Asia research at risk intelligence company Verisk Maplecroft. “Its more realistic trajectory is to become the world’s largest AI adoption market, embedding AI at scale through digital public infrastructure and cost-efficient applications,“ she said. Prihesh Ratnayake, head of AI initiatives at think-tank Factum, told AFP that the new Indian AI models were “not really meant to be global”. “They’re India-specific models, and hopefully we’ll see their impact over the coming year,“ he said. “Why does India need to build for the global scale? India itself is the biggest market.” And Nanubala Gnana Sai, a MARS fellow at the Cambridge AI Safety Institute, said that homegrown models could bring other benefits. Existing models, even those developed in China, “have intrinsic bias towards Western values, culture and ethos – as a product of being trained heavily on that consensus”, Sai told AFP. India already has some major strengths including “technology diffusion, eager talent pool and cheap labour”, and dedicated efforts can help startups pivot to artificial intelligence, he said. “The end-product may not ‘rival’ ChatGPT or DeepSeek on benchmarks, but will provide leverage for the Global South to have its own stand in an increasingly polarised world.”

showed some of the sharpest rises in unemployment in the private sector between April and October 2025 had come in hospitality and retail. “It’s definitely impacting younger workers more,” he said. The IT sector had also seen above average job losses, possibly due to AI, but overall there was little evidence of firms investing more in labour-saving technology in response to higher labour costs, Caswell said. For most of the time since Britain introduced a minimum wage in 1999, there was little sign that it hurt jobs. The headline jobless rate hit its lowest since the 1970s at 3.6% in 2022. The previous Conservative government set a goal of raising the main minimum wage to two thirds of median earnings, making it one of the highest relative to earnings in Europe. It abolished lower minimum wage rates for workers aged 23-24 in 2021 and for 21 to 22-year-olds in 2024. The current Labour government has pledged to end lower minimum pay rates for 18 to 20-year-old workers. The main minimum wage rate now stands at £12.21 (RM64) an hour – up 29% over the past three years – while the rate for 18 to 20-year-old workers has risen 46% to £10 an hour over the fast-growing AI sector. It is the largest yet and the first in a developing country, with Indian businesses striking deals with US tech giants to build large-scale data centre infrastructure to help train and run AI systems. Another Indian company that drew attention with product debuts this week include the Bengaluru based Gnani.ai, which introduced its Vachana speech models at the summit. Trained on more than a million hours of audio, Vachana models generate natural-sounding voices in Indian languages that can process customer interactions and allow people to interact with digital services out loud. Job disruption and redundancies, including in India’s huge call centre industry, have been one key focus of discussions at the Delhi summit. The government-supported BharatGen initiative, led by a group based at a university in Mumbai, also released a new multilingual AI model this week. So-called sovereign AI has become a priority for many countries hoping to reduce dependence on US and Chinese platforms while ensuring that systems respect local regulations including on data privacy. AI models that succeed in India “can be deployed all over the world”, Modi said on Thursday. But experts said the sheer computational might of the US would be hard to match. “Despite the headline pledges, we

Young Britons face mounting challenges finding work as vacancies shrink and competition intensifies. – PEXELS PIX

of her term, but stopped short of denying the report. The ECB president said last year she intended to complete her term, a commitment she conspicuously failed to repeat this week. When Lagarde’s name first emerged as a possible candidate for ECB president in 2019, she said she had no interest in the job and would not leave the International Monetary Fund, where she was the managing director. Lagarde told the Journal that she viewed her mission as price and financial stability, as well as “protecting the euro, making sure that it is solid and strong and fit for the future of Europe.” She also said that the World Economic Forum was “one of the many options” she was considering once she left the central bank. Bank of France Governor Francois Villeroy de Galhau announced plans to step down from his job last week, in a move that gives Macron a chance to pick the next French central bank chief. The French president picks the country’s central bank governor and, as the head of the euro zone’s second largest economy, plays an important role in wider negotiations to select the head of the ECB. Polls show either far-right National Rally leader Marine Le Pen, or her protege Jordan Bardella, could win the French presidency. While the party has long dropped a call for France to leave the euro, the party is still seen as something of an unknown quantity in central banking circles. – Reuters Minimum wage rates for 2027 will be set in October or November based on advice from a public body representing businesses, academics and trade unions. Nye Cominetti, an economist at the Resolution Foundation, a think tank focused on issues affecting lower earners, said evidence that a higher minimum wage was to blame for youth unemployment was not cast iron but was strong enough for the government to be more cautious about future rises. “In a world where the youth labour market looks rocky ... big increases in the youth minimum wage rate are probably the wrong way to go,” he said. – Reuters

FRANKFURT: Christine Lagarde expects completing her mission as president of the European Central Bank (ECB) will take until the end of her term, she told the Wall Street Journal in an interview on Thursday, amid reports she would step down before her contract expired. Lagarde’s comments come after the Financial Times reported on Wednesday that she planned to leave her job before the end of her contract in October 2027 and ahead of next year’s French presidential election, to give outgoing French leader Emmanuel Macron a say in picking her successor. “When I look back at all these years, I think that we have accomplished a lot, that I have accomplished a lot,“ she said, adding,“We need to consolidate and make sure that this is really solid and reliable. So my baseline is that it will take until the end of my term.” Reuters exclusively reported on Thursday, Lagarde sent a private message to fellow policymakers later on Wednesday, reassuring them that she was still concentrating on her role of leading Europe’s most important financial institution and that they would hear it from her, rather than the press, if she wanted to step down. Like her message to colleagues, Lagarde’s Journal interview dampened speculation about an early exit but left the door ajar to the possibility. She declined to comment to the newspaper on the Financial Times report. The ECB said in a written statement that Lagarde had not made a decision about the end the time you’re not even getting a response,” Kelly said. “A lot of people I know have just stopped applying for jobs.” Elsa Torres, 20, in her final year of a business studies degree in Liverpool, has been unable to find a part-time job, despite 70 applications, after the gastropub where she was a waitress closed down. The Times reported on Wednesday that the government was considering abandoning its long-term plan to end the lower rate of pay for 18 to 20-year olds. In response, a government spokesman said the minimum wage was going up “so that low-paid workers are properly rewarded”.

India chases ‘DeepSeek moment’ with homegrown AI models

Lagarde tells WSJ she expects to complete her term as ECB chief