Washington freezes Britain’s £31bn ‘step change’ tech deal

The US has paused its promised multibillion-pound investment into British tech over trade disagreements, marking a major setback in US-UK relations.

- Eleni Courea Political correspondent

The £31bn prosperity deal, hailed by Keir Starmer as "a generational step change in our relationship with the US" when it was announced during Donald Trump's state visit, has been put on ice by Washington.

As part of the deal, US tech giants pledged to spend billions in the UK, including a promised £22bn investment from Microsoft and £5bn from Google. But Washington has paused its implementation, citing a lack of progress from the UK in lowering trade barriers in other areas.

British officials sought to downplay the development, which was first reported by The New York Times.

The newspaper said Trump's administration was unhappy about the UK's digital services tax on US tech companies and its food safety rules, which bar the export of certain agricultural products.

One British government source said it was "the usual bit of hardball negotiations by the Americans" and argued that a deal to allow tariff-free British pharmaceutical exports to the US had also been on and off before it was finalised.