UK Research Funding Faces Cuts Amidst Global Economic Shifts
The UK's £8 billion research fund, managed by UK Research and Innovation (UKRI), is bracing for significant changes as it pauses new grant allocations and prepares for "hard decisions" regarding future projects, according to BBC Technology. This development coincides with major tech companies, including Amazon, increasing spending on artificial intelligence (AI) infrastructure, while Canada is implementing strategies to reduce reliance on the U.S. auto industry, and the Bank of England hints at potential interest rate cuts.
Ian Chapman, the head of UKRI, stated in an open letter that the government has instructed the organization to "focus and do fewer things better," which he anticipates will have "negative outcomes for some." The changes represent a major reorganization of how Britain's scientific research and innovation are prioritized and funded with public money.
Meanwhile, Amazon announced plans to spend £147.7 billion this year on business development, with a significant portion allocated to AI. This represents a substantial increase from the £92.3 billion spent last year. Despite the aggressive spending plans, investors reacted negatively, causing Amazon's shares to fall by more than 11% in after-hours trading, according to BBC Business. Amazon's spending plans are now the most aggressive among the Big Tech companies, including Meta, Google and Microsoft, collectively they expect to spend around £500 billion on AI and related projects.
In Canada, Prime Minister Mark Carney unveiled a plan to bolster the country's car industry and support its electric vehicle transition, as the sector buckles under the weight of U.S. tariffs, according to BBC Business. The new initiatives, announced on Thursday, mark Canada's latest effort to reduce its reliance on the U.S., amid President Donald Trump's push for more domestic car production. Carney's strategy includes financial incentives for carmakers to invest in Canada and the reintroduction of rebates for EVs. Trump last year imposed a 25% tariff on Canadian cars and car parts.
The Bank of England held interest rates steady, but signaled potential rate cuts in the future, according to BBC Business. However, the report cautioned that mortgage rates are unlikely to return to the lows seen during the Covid-19 pandemic. The Bank's primary objective is to bring inflation down to its 2% target and maintain it at or slightly below that level over the next couple of years. The Bank expects subdued growth and a weak.
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