Why Trump's Ukraine Reversal May Be Europe's ‘9-11 Moment'
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Leaders across European capitals are scrambling to work out what the withdrawal of US military aid means for Ukraine and Europe's security as a whole. Led by UK Prime Minister Keir Starmer, a 'coalition of the willing' has been formed to support Ukraine both financially and militarily. But will it be enough?
To help us answer that question, host Allegra Stratton is joined by Tom Tugendhat, a Conservative member of Parliament who previously served as security minister. He says the return of Donald Trump to the White House and his actions to distance America from Ukraine and Europe is a '9-11 moment—one of those moments where you have to rethink the fundamentals.'
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Yahoo
12 minutes ago
- Yahoo
What salary sacrifice changes could mean for your pension
The government has insisted recent reports indicating that it is considering changes to salary sacrifice pension schemes are "purely speculative". It comes off the back of research published by HMRC in May that suggested the government was exploring reducing the tax and national insurance advantages by changing pension contribution schemes for workers. While the research was commissioned by the Conservative government in 2023, the timing of its publication raised eyebrows because of it's proximity to Rachel Reeves's spending review on 11 June. The spending review is when Reeves will lay out all government departments' budgets for the coming years. It could also be a strong indication as to whether the government will need to announce any increase to taxes later this year in the autumn statement. Experts have told Yahoo News why the prospect of targeting salary sacrifice schemes would be so appealing for the government - and who would most likely miss out. A salary sacrifice scheme is a formal agreement between an employee and employer in which the employee agrees to reduce their gross salary in exchange for a non-cash benefit - like a bicycle through the Cycle to Work scheme - provided by the employer. In turn, as the employee pays for this through their salary, they not only pay less income tax, but their employer pays lower national insurance (NI) on the person's remaining take home-pay. As national insurance is one of the main revenue streams for the government, this means that when an employee enrols in a scheme, the Treasury misses out on the extra tax. When you use salary sacrifice for your pension, you agree to take a lower salary, and your employer pays the 'sacrificed' amount directly into your pension. Like with any other salary sacrifice, because your official salary is lower, both you and your employer pay less in NI, and you pay less income tax on your earnings. Salary sacrifice schemes are very popular, with 70% of UK pension schemes using them as the default method for contributions. If the salary sacrifice scheme was limited or cut for pensions, the government could remove or limit these tax and NI savings. For example, you and your employer might have to pay NI on the amount you sacrifice, or there could be a cap on how much salary can be sacrificed before the benefits are lost. "Salary sacrifice along with income tax relief makes it very attractive to save into a pension," Stuart Price, Partner and Actuary at Quantum Advisory told Yahoo News. "For a lower rate tax payer £1 invested only costs them 72p, and for a high rate tax payer £1 invested only costs them 58p. "If the provision of salary sacrifice is removed and hence national insurance relief is no longer provided these numbers increase to 80p for a lower rate tax payer and 60p for a higher rate tax payer," he added. By removing or scaling back the tax and National Insurance (NI) exemptions that benefit employees and employers benefit from through salary sacrifice, the government could boost its revenue. 'Salary sacrifice along with the annual allowance often appear top of the list of options when the government needs to save money," Helen Morrissey, head of retirement analysis at Hargreaves Lansdown told Yahoo News. The move would therefore be an attractive prospect for HMRC because it would generate "significant income". "I would expect that they would be in favour of the removal of salary sacrifice on pensions," John Mullaly, a group risk and healthcare consultant from actuary Cartwright Employment Awards, told Yahoo News. This may be even more significant as the government is just days away from its spending review, the process the government uses to set all departments' budgets for future years. 'The government may be tempted to turn its eye to salary sacrifice... particularly given the amount it costs in lost national insurance revenue," Martin Willis, a partner at independent consultancy Barnett Waddingham explained to Yahoo News. While the government might benefit, employees earning the least would be the hardest hit. "High earners may be insulated from any potential shift; the real impact would be on lower and moderate earners - particularly those using salary sacrifice to top up pension contributions," Waddingham said. The move could also be an additional blow for businesses after the government's hike on national insurance rates for employers in the last Budget. "Removing it now could disproportionately affect basic rate taxpayers and employers who've only just faced a rise in national insurance costs," Willis added. Morrissey echoes this. "At a time when employers are battling higher wage and NI bills, salary sacrifice might be seen as one way of reducing these costs – making changes will add an extra burden to struggling employers.' While both employees and employers benefit from salary sacrifice arrangements, Mullaly said employers "do not pocket all of the savings." "Quite often they use it to fund additional benefits to be used to attract and retain employees," he added. Additionally, if salary sacrifices adversely affect pension pots, savers could be discouraged from putting away enough into their pension — which is unwelcome news when the figure for a comfortable retirement continues to rise. According to the Pensions and Lifetime Savings Association (PLSA), to live a comfortable retirement in the UK, the estimated annual retirement income needed in 2025 is around £43,100 a year. "There does seem to be a trend of focusing on increasing tax revenue at the expense of all other considerations, rather than focusing on the underlying social reasons for having things like a pension," Price said. "The result of all of this is less money will be saved by employees towards their pension. Not a great thing when as a nation we are nowhere near saving enough for our retirement." Added to this, the change in uptake could affect how and where pension funds invest their money. "Many of the largest pension funds invest in our high streets, shopping centres and other real estate," Mullaly explained. "With many high streets already under threat, any reduction in investment is only going to make the situation in this area worse." While salary sacrifice reduction may be a highly attractive prospect for the government, it is clear that it would be far from popular. The Society of Pension Professionals has already warned the government against salary sacrifice changes, writing in a statement that it would affect earners "very selectively". Added to this, there would be some serious logistical hurdles to tackle to implement it. Firstly, Willis said implementing these reforms after the new financial year has started "would likely be far from straightforward". "Currently, salary sacrifice reward structures are set by employers, so implementing changes could be very messy, especially when it comes to capturing salary decisions for new hires or changes mid-year," he told Yahoo News. "Today salary sacrifice is largely used to support improved pension saving, and is limited since the system was already tightened in 2017." A government spokesperson said: 'These claims are totally speculative. HMRC regularly commissions independent research on all aspects of the tax system, and this research was commissioned under the previous government. 'We are committed to keeping taxes for working people as low as possible which is why, at last autumn's Budget, we protected working people's payslips and kept our promise to not raise the basic, higher or additional rates of income tax, employee national insurance or VAT."
Yahoo
22 minutes ago
- Yahoo
Stock market today: S&P 500, Dow, Nasdaq mixed as US and China reboot trade talks
US stocks were mixed on Monday as investors looked to renewed US-China trade talks for signs either side is willing to dial down tensions and reach a tariff deal. The S&P 500 (^GSPC) rose 0.1% after the benchmark edged above 6,000 to notch its highest close since February. The Dow Jones Industrial Average (^DJI) fell 0.4% while the tech-heavy Nasdaq Composite (^IXIC) drifted up 0.4%. The focus is on high-level US-China trade talks that began in London on Monday, after a phone call between President Trump and Chinese President Xi last week. Read more: The latest on Trump's tariffs The stakes are high amid warnings that tariff barriers will harm economies worldwide — the US in particular. Investors are looking for a revival of the momentum shown in the Geneva pact in mid-May. Relations have soured since then, with the US and China accusing each other of not keeping to the trade truce and ratcheting up pressures in other areas. For now, markets appear to have shaken off the volatility that has plagued markets following Trump's early-April tariff hikes. Stocks ended last week on a high note, as encouraging jobs data helped ease fears of a recession fueled by his policy overhaul. The economic highlight this week is May US consumer inflation print due on Friday, with the wholesale inflation report ushering it in on Thursday. On the corporate front, Apple (AAPL) kicks off its big annual WWDC developers conference on Monday. Wall Street is watching for more insight into the company's AI plans, though not on the lines of last year's splashy announcements. Meanwhile, investors are keeping a wary eye on escalating tensions in Los Angeles after Trump sent in the National Guard to deal with anti-deportation protests. Tesla (TSLA) recovered from a 4% drop on Monday, following two analyst downgrades following CEO Elon Musk's public feud with President Trump. Baird has downgraded the stock from Outperform to Neutral, citing excessive optimism surrounding the company's Robotaxi rollout, fading EV tax credits, and the public clash between Musk and Trump which sent the stock reeling last week. Argus Research also lowered its recommendation to Hold, pointing out the political fallout from Musk's war of words with Trump. The company is reportedly planning to launch its latest robotaxi on Thursday, June 12 Circle's stock (CRCL) surged for a third day in a row on Monday following its blockbuster IPO last week. Shares of the stablecoin issuer gained more than 15% to trade near $122 per share, raising the company's market cap to roughly $24 billion. The move follows gains on Thursday and Friday, when the stock rose as much as 200% shortly after its long-anticipated public market debut. Stocks edged higher on Monday amid hopes that US-China trade talks will ease tariff tensions and eventually lead to a permanent deal between the two leading economies. The S&P 500 (GSPC) rose to just above the flat line, after the broad benchmark closed on Friday at its highest level since February. The Dow Jones Industrial Average (^DJI) gained 0.1%, while the tech-heavy Nasdaq Composite (^IXIC) edged 0.2% higher. High-level trade talks between Beijing and Washington began in London on Monday. This follows a phone call between President Trump and Chinese leader Xi Jinping last week. Apple's annual Worldwide Developers Conference (WWDC) kicks off in Cupertino, Calif., today. While investors may get another taste of artificial intelligence features, including AI-powered Siri, Apple isn't expected to deliver any big announcements. The company will likely showcase new features and designs for iOS, iPadOS, macOS, and watchOS. There's always a chance it will debut a new piece of hardware too. Apple (AAPL) stock rose 0.5% in premarket trading ahead of the event. Read our tech editor's preview of everything to expect from Apple WWDC 2025. Robinhood (HOOD) stock slipped 4% after it didn't make it into the benchmark S&P 500 index as some speculated it might. S&P Dow Jones Indices did not make any changes to S&P 500 membership as part of its quarterly rebalancing. Reuters reports: Read more here. Shares of Warner Bros. Discovery (WBD) rose more than 6% in premarket trading on Monday after the media company said it would split into two companies. Warner Bros. will separate its studios and streaming business, which includes HBO Max, and its cable television networks, including CNN. The split is expected to be completed by mid-2026. Reuters reports: Read more here. Economic data: New York Fed one-year inflation expectations (May); Wholesale trade sales month-over-month (April) Earnings: Casey's (CASY) Here are some of the biggest stories you may have missed overnight and early this morning: All eyes on AI as Apple takes the stage for WWDC A quieter summer is coming for stocks: Wall Street experts Hopes for US-China thaw as trade talks resume Senate GOP to lay out major revisions to Trump's tax bill Resilient economy to limit summer pullback in stocks: MS, Goldman Meta is set to throw billions at startup that leads in AI data China exports to US fall by most since 2020 despite tariff truce Here are some top stocks trending on Yahoo Finance in premarket trading: Robinhood (HOOD) stock fell 5% before the bell on Monday after the S&P Dow Jones Indices made no changes to the S&P 500 in its quarterly rebalancing. Tesla (TSLA) stock also dropped on Monday in premarket trading after CEO Elon Musk criticized President Trump's tax bill. Strategy (MSTR) stock rose on Monday by 2%. A SEC filing revealed the company had purchased 705 bitcoin during the period of May 26 to June 1 at an aggregate purchase price of $75.1M. Wall Street strategists are growing optimistic about US stocks, with forecasters at Morgan Stanley (MS) and Goldman Sachs Group (GS) the latest to suggest resilient economic growth would limit any pullback over the summer. Bloomberg reports: Read more here. Tesla (TSLA) recovered from a 4% drop on Monday, following two analyst downgrades following CEO Elon Musk's public feud with President Trump. Baird has downgraded the stock from Outperform to Neutral, citing excessive optimism surrounding the company's Robotaxi rollout, fading EV tax credits, and the public clash between Musk and Trump which sent the stock reeling last week. Argus Research also lowered its recommendation to Hold, pointing out the political fallout from Musk's war of words with Trump. The company is reportedly planning to launch its latest robotaxi on Thursday, June 12 Circle's stock (CRCL) surged for a third day in a row on Monday following its blockbuster IPO last week. Shares of the stablecoin issuer gained more than 15% to trade near $122 per share, raising the company's market cap to roughly $24 billion. The move follows gains on Thursday and Friday, when the stock rose as much as 200% shortly after its long-anticipated public market debut. Stocks edged higher on Monday amid hopes that US-China trade talks will ease tariff tensions and eventually lead to a permanent deal between the two leading economies. The S&P 500 (GSPC) rose to just above the flat line, after the broad benchmark closed on Friday at its highest level since February. The Dow Jones Industrial Average (^DJI) gained 0.1%, while the tech-heavy Nasdaq Composite (^IXIC) edged 0.2% higher. High-level trade talks between Beijing and Washington began in London on Monday. This follows a phone call between President Trump and Chinese leader Xi Jinping last week. Apple's annual Worldwide Developers Conference (WWDC) kicks off in Cupertino, Calif., today. While investors may get another taste of artificial intelligence features, including AI-powered Siri, Apple isn't expected to deliver any big announcements. The company will likely showcase new features and designs for iOS, iPadOS, macOS, and watchOS. There's always a chance it will debut a new piece of hardware too. Apple (AAPL) stock rose 0.5% in premarket trading ahead of the event. Read our tech editor's preview of everything to expect from Apple WWDC 2025. Robinhood (HOOD) stock slipped 4% after it didn't make it into the benchmark S&P 500 index as some speculated it might. S&P Dow Jones Indices did not make any changes to S&P 500 membership as part of its quarterly rebalancing. Reuters reports: Read more here. Shares of Warner Bros. Discovery (WBD) rose more than 6% in premarket trading on Monday after the media company said it would split into two companies. Warner Bros. will separate its studios and streaming business, which includes HBO Max, and its cable television networks, including CNN. The split is expected to be completed by mid-2026. Reuters reports: Read more here. Economic data: New York Fed one-year inflation expectations (May); Wholesale trade sales month-over-month (April) Earnings: Casey's (CASY) Here are some of the biggest stories you may have missed overnight and early this morning: All eyes on AI as Apple takes the stage for WWDC A quieter summer is coming for stocks: Wall Street experts Hopes for US-China thaw as trade talks resume Senate GOP to lay out major revisions to Trump's tax bill Resilient economy to limit summer pullback in stocks: MS, Goldman Meta is set to throw billions at startup that leads in AI data China exports to US fall by most since 2020 despite tariff truce Here are some top stocks trending on Yahoo Finance in premarket trading: Robinhood (HOOD) stock fell 5% before the bell on Monday after the S&P Dow Jones Indices made no changes to the S&P 500 in its quarterly rebalancing. Tesla (TSLA) stock also dropped on Monday in premarket trading after CEO Elon Musk criticized President Trump's tax bill. Strategy (MSTR) stock rose on Monday by 2%. A SEC filing revealed the company had purchased 705 bitcoin during the period of May 26 to June 1 at an aggregate purchase price of $75.1M. Wall Street strategists are growing optimistic about US stocks, with forecasters at Morgan Stanley (MS) and Goldman Sachs Group (GS) the latest to suggest resilient economic growth would limit any pullback over the summer. Bloomberg reports: Read more here.
Yahoo
23 minutes ago
- Yahoo
The City exodus undermining Starmer's plans for a tech revolution
Standing on stage at London Tech Week on Monday, Sir Keir Starmer declared Britain was 'unequivocally, unashamedly and defiantly open for business'. 'Britain once again, after years of chaos, is a stable partner for investors,' he told executives gathered for a conference. The country would be a 'maker', not a taker, of artificial intelligence (AI) software, the Prime Minister asserted, flanked by Jensen Huang, the superstar boss of US chip giant Nvidia. He also came armed with impressive-sounding announcements, including a billion-pound pledge to boost the UK's computing power and a programme to train school children in AI software. Yet despite Starmer's bullish remarks, things are far from rosy in the British tech scene. That very morning, Alphawave, a British semiconductor company, had announced it was set to become the latest tech business to quit the London stock market after revealing its £1.8bn sale to American rival Qualcomm. The sale follows a drop of more than 50pc in Alphawave's shares since floating in 2021. Hours later Spectris, a FTSE 250 company that makes high-tech instruments and software, revealed it had received a £3.7bn takeover bid from private equity company Advent. Just three days before Starmer's speech, financial technology champion Wise – yet another 2021 alumnus – announced that it would shift its primary listing to New York. Kristo Käärmann, Wise's co-founder, said the change was aimed at raising his company's profile in 'the largest market in the world', after pressure from major shareholders to relocate. Meanwhile, Deliveroo, the fast food delivery app that went public the same year as Alphawave, also served itself up for a £7.6bn takeover by US competitor DoorDash last month, bringing an end to a similarly unhappy spell on the London Stock Exchange. The exodus poses a major challenge for the Prime Minister and Peter Kyle, the Technology Secretary, as they attempt to make the UK a hotbed of AI investment. In January, Starmer set out plans to 'turbocharge' the domestic tech industry with new 'AI growth zones' that will allow companies to easily secure planning permission and power connections for data centres – the key infrastructure needed to underpin AI development. The Prime Minister has also sought to link AI directly to the lives of citizens, arguing the software can help NHS hospitals run more effectively, aid teachers in the classroom and even do away with Whitehall bureaucracy. And on Monday, there was some good news for Starmer. Nvidia's Huang argued that the UK was in the 'goldilocks' zone: great universities, a good start-up culture and the third-largest amount of investment in AI companies globally – behind only the US and China. 'The ecosystem is nearly perfect for take-off. It's just missing one thing. It is surprising that this is the largest AI ecosystem in the world without its own infrastructure, which is the reason why we're talking about it so much, which is the reason why the Prime Minister's announcement is such a big deal,' he said, referring to efforts to boost the amount of computing power in the UK. Yet data centres or not, Britain has consistently struggled to nurture technology companies from start-up to 'scale up' stage. Whereas the US has created titans such as Google, OpenAI, Amazon and Facebook owner Meta, few such champions exist in the UK. What's more, many of those that have emerged over the years have been sold off or opt to list on the other side of the Atlantic, rather than at home. Take Arm Holdings, for example, the Cambridge-based chip designer that was taken over by Softbank in 2016 and then floated as a standalone business in New York, rather than London, in 2023. Or the leading AI lab Deepmind, which was snapped up by Google in 2014 for a reported £400m – and has since become a powerhouse within the tech giant's operations. The London Stock Exchange has traditionally been where UK-based businesses go to raise capital for growth, but in recent years some of Britain's brightest tech start-ups have shunned the City and preferred to remain private instead. Many of those that are now considering a listing could go elsewhere. Revolut, the fintech star, has in the past dismissed a London listing as 'not rational', while the founder of Octopus Energy, another company seen as a promising listing candidate, said it was 'not obvious' the UK capital would be its first choice. Tech companies complain they get lower valuations in the UK than the US, making it harder to raise money to grow and attract the best talent through share-based pay packages. Entrepreneurs says British investors prefer reliable dividends over growth companies, a preference that particularly punishes tech. As a result, many go elsewhere. This is despite ministers repeatedly trying to make London more attractive through various reforms to listing rules, including changes to allow founders to retain control over their companies by holding different classes of shares. Andrew Griffith, the shadow business secretary, argues that the loss of prestigious listings is 'symptomatic of a 'vibe shift' away from London'. 'This socialist government's culture war on wealth creators, plus London's crime and congestion, have combined so that push factors outweigh the natural attractions that the UK has,' he says. 'Conversations which used to happen here are now taking place in Milan, Miami or Dubai. 'You can deliver technical reforms to listings all you like, but if wealth creators feel under attack they won't succeed.' Brent Hoberman, the dotcom investor who co-founded and now runs Founders Forum, the co-host of London Tech Week, agrees that part of the problem is a culture and tax regime that treats entrepreneurs – including those who come here from other countries – too harshly. He says the Government must understand 'the value of the tremendously successful entrepreneurs who have been living in this country and how damaging it is when they leave', amid a recent exodus of millionaires. 'Why do they leave? Partly because of non-dom tax changes introduced by the Conservative government,' he says. 'But also because this [Labour] government has gone further and faster, including with inheritance tax changes. 'That perceived unfairness by those people means they choose to leave to countries that give them very competitive deals. 'Hopefully this week signifies a course-correction, embodied by the Prime Minister's keynote alongside Jensen Huang – promoting the UK's global leadership in AI.' Orlando Bravo, managing partner of tech-focused investor Thoma Bravo, also recently claimed that the strict rules governing London-listed companies makes it unnecessarily difficult to buy them, depressing their values. It was a somewhat self-serving argument from an American company that has bought several UK-listed businesses, including cyber security firms Darktrace and Sophos. However, ministers should be wary of ignoring such feedback at a time when the decline of the market appears to be accelerating. Ministers will be keenly aware of all these challenges - not least Baroness Gustafsson, the investment minister who until recently was chief executive of Darktrace. On Monday, she joined Sir Keir at the opening of London Tech Week but said little other than the pre-prepared questions she asked the Prime Minister on stage. 'How do we create an AI ecosystem?' Gustafsson asked during a sit-down chat with Nvidia's Huang. It is a question that ministers will now be weighing with much greater urgency, as they scramble to ensure the most promising tech companies don't take their best ideas elsewhere. Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more.
