LONDON BRIEFING:Tens of thousands of school leavers and graduates are battling for jobs in the UK

IF EVER there was a time to take a gap year, this is it. Tens of thousands of school leavers and graduates are battling for employment in the toughest jobs market for decades; many will be disappointed, and many more still will find themselves forced to take work well beneath the level of their hard-won qualifications. What better time, then, assuming you have the funds, to ride out the rest of the recession with a round-the-world trip?

While opinion remains divided on exactly when the upturn will materialise, there is no disagreement that the lagging indicator of unemployment will continue to rise for months to come.

That is bad news for anyone who has yet to gain a foothold in the jobs market. The young have been hardest hit by this recession, with the number of unemployed under the age of 25 expected to break through the one million level by the end of the year.

Among 18- to 24-year-olds in the UK, one in six is classified as a “neet” – not in employment, education or training – raising fears of a lost generation of unemployed and increasingly disillusioned young adults.

Unemployment takes a huge toll at any age, but the young are particularly badly affected.

According to economist and former Bank of England monetary policy committee member David “Danny” Blanchflower, who has made a special study of youth unemployment, those who suffer sustained joblessness early in life tend to have lower incomes and poorer market experiences later in life. “Unemployment while young creates permanent scars rather than temporary blemishes,” he says.

About 400,000 school leavers, many of whom will receive their GCSE results tomorrow, will flood on to the dwindling jobs market this year, joined by about 300,000 university graduates.

The days when a university degree carried with it a guarantee of a well-paid job are long gone, but this year’s crop of college leavers face a real struggle.

Many will be forced to take jobs that would otherwise have gone to school leavers with half a dozen decent GCSEs, leaving the school leavers even shorter on work opportunities.

The appalling state of the employment market was underlined by news earlier this week that telecoms giant BT, one of Britain’s biggest employers, has frozen its graduate recruitment scheme for 2010.

BT took on 130 graduates in 2008/2009, not a huge figure, but certainly significant to those who managed to secure one of the posts after fighting off competition from almost 5,000 other applicants. It was more the message that the BT move sent out that was worrying – and the fear that it will be followed by other bluechip employers.

It is not hard to see why BT decided to ditch its graduate recruitment scheme – the group has already axed 15,000 jobs and is desperate to cut costs. It could be seen as perverse to take on new hires while it wields the axe elsewhere among its workforce.

But that is the short-term view; in the long term, BT will have missed out on some of the brightest graduates of the class of 2009, one or more of whom might just have had the potential to reach the top of the company long after its current crop of senior executives has retired.

There are mercifully few signs so far that BT’s example will be followed by other large employers, although many are cutting back on their schemes.

The accountancy firms are still taking large numbers of university leavers, as are the banks, despite all their problems.

The retailers are also still committed to their long-standing graduate trainee schemes, with Tesco and Marks Spencer each taking on a couple of hundred people straight from university.

Competition for these jobs will be fiercer than ever, however. Nor will the current dire state of the market be good news on the pay front: according to the Association of Graduate Recruiters, starting salaries will be frozen this year for the first time in more than three decades.

The luckiest graduates must be those who were offered jobs last year by some of London’s leading law firms, including Norton Rose and Clifford Chance.

As the credit crunch took its toll on fee income, the lawyers found a novel way to hold on to their crop of new recruits without actually having to train them – they offered the graduates cash sums of up to £10,000 (€11,400) each to delay their start dates by a year.

Many of those happy graduates are now halfway around the world on extremely well-funded gap years – and with a well-paid job waiting at home.

Fiona Walsh writes for the Guardian newspaper in London