Nancy Pelosi’s rejection of standalone aid for the US airline sector punctuated some of the optimism in the markets.

Her comments, just before the closing bells rang in Europe, knocked stocks back from their earlier gains.

Although there wasn’t much time for investors to react, so the Stoxx 600 still ended at its highest point in almost three weeks.

Here’s Reuters take:

U.S. House Speaker Nancy Pelosi on Thursday said there would be no additional federal aid for U.S. airlines without a more comprehensive COVID-19 relief package, adding that she was hopeful for a larger deal “because it has to be done.”

“Ain’t going to be no standalone bill, unless there is a bigger bill,” Pelosi told reporters.

That rather undermines Donald Trump’s claim earlier that talks were going well.

Here’s the closing prices.

• FTSE 100: up 31 points or 0.5% at 5978
• German DAX: up 130 points or 1% at 13,059
• French CAC: up 36 points or 0.75% at 4,918

That’s all for tonight. GW

The US stock market has opened with some small gains, as investors cling to hopes of stimulus measures soon.

The Dow Jones industrial average has jumped by 105 points, or 0.4%, to 28,409 points, which is its highest level since early September.

The tech-focused Nasdaq has gained 65 points, or 0.6%, to 11,430 points.

The rally comes as president Donald Trump suggests that relief for Americans could be back on the table, just days after cancelling negotiations with Democrats earlier this week.

He told Fox News earlier today talks are underway again:

I shut down two days ago because they weren’t working out. Now, they’re starting to work out. We’re starting to have some very productive talks.

Those talks include support for airlines, and $1,200 checks for Americans, Trump adds.

House speaker Nancy Pelosi, though, has been pushing for a comprehensive $2.2 trillion package, rather than this ‘piecemeal’ package which Trump is keen to agree before the election.

Several economists and investors are concerned that US jobless claims seem to have levelled off at a worryingly high level.

Joseph Brusuelas, chief economist at RSM, says there’s no V-shaped recovery in the labor force:

Randy Frederick of Schwab tweets:

Here’s Grant Thornton’s chief economist, Diane Swonk:

Newsflash: The number of Americans seeking unemployment benefits remains worryingly high.

The latest jobless figures show that 840,000 new ‘initial claims’ for unemployment support were filed last week, on a seasonally adjusted basis. That’s more than the 820,000 expected, and shows that there’s been little improvement for several weeks.

The previous week’s figures have been revised higher too, to 849,000 new claims, not the 837,000 first reported.

On a non-seasonally adjusted basis, the number of initial claims rose to 804,000, from 799,000.

In addition, around 464,000 people applied for help from the Pandemic Unemployment Assistance (PUA) scheme (for workers who don’t qualify for initial claims).

So the total number of new jobless claims was around 1.3 million last week.

Having peaked at over 6 million one week early in the crisis, the initial jobless total has been falling steadily -- but it’s still persistently high, and above its previous record before Covid-19.

This suggests some US companies are still making job losses, even as other companies take on more staff.

Opec, the oil cartel, has cut its forecast for long-term demand for crude - but dismissed claims that peak oil may have already arrived.

In its latest World Oil Outlook, Opec doesn’t accept that oil demand have already reached its peak and insisted that it will continue to grow until the 2030s.

The cartel admitted that the coronavirus means demand will be weaker than expected but also forecasts steady growth for years once the pandemic eases.

The new forecasts show demand plunged this year, to 90.7m barrels per day from 99.7m bpd in 2019. It sees a partial recovery in 2021, to 97.7m barrels per day, climbing as high as 107.2m bpd by 2030.

But in the long term, Opec reckons demand will hit 109.3 bpd in 2040, but fall to 109.1 bpd in 2045.

Opec says:

“Global oil demand will grow at relatively healthy rates during the first part of the forecast period before demand plateaus during the second half.

“Future demand will likely remain persistently below past projections due to the lingering effects of the COVID-19-related shutdowns and their impact on the global economy and consumer behaviour.”

CNBC has more details:

OPEC cuts long-term forecast for oil demand growth, sees ‘continued disparity’ in climate policy

Opec’s forecast (or hope?) that oil demand will keep rising for the next two decades is more optimistic than others -- BP suggested last month that demand could already have peaked.

Britain’s unions are pushing the government to launch a new ‘local furlough’ scheme to help businesses survive if tough Covid-19 restrictions are imposed in their area.

Scotland announced a new crackdown on pubs and restaurants yesterday, and the North of England could face similar curbs within days.

Such restrictions could push companies under, unless they receive more help, says the TUC.

Its plan includes a new localised furlough scheme for companies with little or no work, and a more generous wage subsidy scheme to encourage firms to bring staff back part time.

TUC general secretary Frances O’Grady explains:

“We all hoped the economy would be starting to reopen and recover this autumn. But with further restrictions imminent in some areas, we need the chancellor to adopt a fresh approach to protect jobs and livelihoods.

“In areas facing high infection rates and further business closures, the government must act to preserve jobs and stop family firms going to the wall through a new local furlough scheme – building on the existing national job retention and job support schemes, with help for the self-employed too. That’s the right response to this renewed public health emergency in parts of the UK.

Here are the details:

• Businesses that are required to close should be able to put workers on a new local furlough scheme. This new scheme should be allowed to run on for the duration of additional restrictions in that area, and be withdrawn gradually as restrictions ease. The scheme should be run nationally, and should mirror the original job retention scheme, reimbursing employers for 80% of the wages of their workers.
  
  
• Businesses based in local lockdown areas that are affected by low demand but not required to close should be eligible for an enhanced local Job Support Scheme, giving financial assistance over and above the national scheme. There should be no requirement to work a minimum number of hours. And the government should cover 60% of wages for non-working time, with the employer covering 20%.
  
  
• The government should also consider how to ensure self-employed workers do not miss out on necessary support, for example, by increasing the payments rate of the self-employment income support scheme round 3 from 20% to 60% of taxable monthly profits for those who can demonstrate renewed reductions in demand as a result of additional local restrictions.

The Bank of England’s financial policy committee fears that corporate insolvencies will rise, as the jump in Covid-19 cases hits the economy.

The minutes of their meeting last week, released this morning, show that the FPC expects some companies will come under heavier pressure in the months ahead.

It warns:

The recent increases in Covid-19 cases, and associated public health measures, have the potential to weigh further on economic activity.

In particular, the FPC is concerned that the cost of credit will rise as the government’s support for the economy eases up.

Some firms may fail altogether, if they cannot borrow more money to keep afloat.

The minutes state:

There had not been widespread reports of companies that were unable to access finance, UK corporate insolvencies remained low, and lending through government backed loan guarantee schemes had levelled off, with £57bn being approved through schemes by mid-September compared to £31bn by May. This suggested that the demand for finance was largely being met by the supply of credit. However, intelligence from the Bank’s regional Agents suggested that there were some pockets of unmet borrowing needs which might translate into signs of distress in the coming months.

While the number of UK corporate insolvencies had remained low to date, the FPC judged it would probably increase. Some companies may struggle because they were highly leveraged or unprofitable prior to March and others faced pressure because of structural changes in the economy.

It was likely that, when these government-backed loan guarantee schemes closed to new applications, the cost of credit provided to companies would increase given the uncertainty about the economic outlook.

Here’s our news story on easyJet’s call for fresh assistance, after suffering its first full-year loss:

EasyJet has called on the British government to provide airlines with a bespoke package of support measures urgently, warning that aviation is facing the most severe threat in its history.

The airline said it expected to report a full-year loss for the first time in its history, forecasting a pre-tax loss of between £815m and £845m for the last 12 months.

EasyJet said it carried over 9 million passengers between July and September, equivalent to 38% of capacity planned before the pandemic. It burned through almost £700m in cash during that period.

It said it was focusing on profitable flying during the winter season, operating just a quarter of its usual schedule between October and the end of the year, in order to minimise its losses and cash burn.

It had raised more than £2.4bn in cash since the start of the pandemic, including a £600m loan from the Treasury and Bank of England’s emergency coronavirus fund which it secured in April with its fleet grounded....

Bank of England Governor Andrew Bailey has warned that Britain’s economy faces ‘unprecedented uncertainty’, due to the Covid-19 pandemic.

The risks to the recovery are “very much on the downside”, Bailey told an online webinar hosted by the European Commission.

He adding that the pick-up in demand since the lockdown has been uneven, with some sectors really struggling (I imagine airlines would be high up that list, along with pubs, retailers, the arts industry....)

Bailey also warned that the pandemic will make it harder to handle Britain’s post-Brexit transition.

Reuters has more details:

“There is an unprecedented level of uncertainty at the moment. And the risks, I’m afraid -- certainly as we see them -- are very much on the downside,” Bailey said, citing the recent rise of COVID-19 cases in Britain.

Asked about the prospect of a trade deal between Britain and the European Union before a post-Brexit transition ends on Dec. 31, Bailey said it was vital that economies remained open.

“Nobody benefits from protectionism in my view,” he said.

Britain’s post-Brexit transition would not be easy and “would have been easier had we not have to deal with COVID,” Bailey said.

City analysts are warning that airlines face tough months ahead... underlining why easyJet is pleading for more government help:

Richard Hunter, Head of Markets at interactive investor:

The likely impending pressure on the consumer could have further implications for the hospitality and leisure sectors.

Meanwhile, the airlines remain in fight rather than flight mode, conserving capital in any way possible, as evidenced by some of the measures announced today by easyJet following the halving of passenger numbers due to the pandemic.

Susannah Streeter, senior investment and markets commentator, Hargreaves Lansdown:

‘’easyJet has made the descent into its first ever loss, as Covid 19 turbulence has rocked the aviation industry. Due to the collapse in air travel, the airline expects to report a pre-tax loss of between £815 and £845 million for the 12 months to the end of September. Over the last three months, it’s only been able to fly 38% of planned capacity. The brief respite of higher bookings in August was dashed after fresh quarantine restrictions were imposed on arrivals across Europe.

The situation is expected to deteriorate over the winter as infections increase, customers remain fearful of flying and tough quarantine rules are kept in place. That is why the company is forecasting that it will only be able to fly a quarter of its planned capacity in the first quarter of 2021. The gravity of the situation, with customer passenger numbers halved to 48 million, has forced it to appeal for urgent government help.

easyJet is facing the worst crisis in its history and like its transatlantic peers, the company is now being forced to play a waiting game, to see if its call will be answered and a rescue package will land to help it navigate through this crisis.’’

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

EasyJet has a message for the UK government this morning -- the airline industry needs more help, fast, to see it through the worst crisis in its history

In a trading statement for the last 12 months, easyJet outlines how the Covid-19 crisis has plunged it deep into the red.

After months of disruption, the airline expects to report a pre-tax loss of between £815m to £845m for the 12 months to 30 September - its first full-year loss ever.

Passenger numbers for the full year halved to 48 million, due to travel restrictions and quarantine rules introduced to slow the pandemic.

EasyJet CEO Johan Lundgren warns shareholders that things will not return to normal for some time:

“Based on current travel restrictions we expect to fly c.25% of planned capacity for Q1 2021 but we retain the flexibility to ramp up capacity quickly when we see demand return and early booking levels for summer ‘21 are in line with previous years.

And faced with such a shortfall, Lundgren says ministers must step up:

“Aviation continues to face the most severe threat in its history and the UK Government urgently needs to step up with a bespoke package of measures to ensure airlines are able to support economic recovery when it comes.

easyJet came into this crisis in a very strong position thanks to its strong balance sheet and consistent profitability. This year will be the first time in its history that easyJet has ever made a full year loss.

More details and reaction to follow....

Also coming up today

The Bank of England’s Financial Policy Committee will release a statement on the UK’s financial stability, following its latest meeting last week. The European Central Bank will publish the minutes of its latest governing council meeting.

Both statements will, presumably, focus on the economic damage caused by Covid-19.

We also get the latest US weekly jobless figures, which are expected to show that over 800,000 Americans filed new unemployment claims last week

The agenda

• 7am BST: German trade balance for August
• 10.30am BST: Bank of England’s Financial Policy Committee statement
• 12.30pm BST: European Central Bank monetary policy meeting accounts
• 1.30pm BST: US weekly jobless figures