Politics
Starmer says decision to increase defence spending was ‘accelerated’ by Trump taking office
Sir Keir Starmer has admitted his decision to increase defence spending was “accelerated” by Donald Trump taking office.
The prime minister said today’s announcement was “three years in the making” after Russia invaded Ukraine – but a “very changed context” pushed him forward.
Politics Live: PM warns ‘everything has changed’ after announcing defence spending boost
In a surprise Commons statement on Tuesday morning, Sir Keir said defence spending will increase to 2.5% of GDP by 2027, funded by a cut in the foreign aid budget.
While this honours a Labour manifesto commitment, ministers have previously been tight-lipped about when the new target would be reached – with today’s decision coming ahead of a meeting between Sir Keir and Mr Trump in Washington on Thursday.
Asked by Sky News political editor Beth Rigby if Mr Trump had “bounced” him into setting out a timeline, given he has long called for European countries to boost defence spending, the prime minister said: “I think in our heart of hearts, we’ve all known that this decision has been coming for three years, since the beginning of the conflict in Ukraine.
“The last few weeks have accelerated my thinking on when we needed to make this announcement.”
Analysis: Starmer has put Britain on a war footing ahead of key Trump meeting
However, he denied Mr Trump was effectively setting UK government policy, saying the defence spending increase is “very much my decision” and he has been “arguing for some time” that Europe and the UK “needed to do more”.
He said talks of “possible peace” and what that would mean for Europe’s security – with the potential for UK peacekeeping troops to be put on the ground – “has brought our response into sharp focus”.
“I have pushed our system to move this date forward because I think it’s vital that we take the decision now, that we rise to the occasion and we show the leadership that’s needed across Europe, in response to a very changed context,” he said.
Sir Keir Starmer
The UK currently spends 2.3% of GDP on defence, with the jump to 2.5% meaning £13.4bn more will be spent annually on defence from 2027.
Sir Keir said he wants that figure to reach 3% of gross domestic product during the next parliament, but that would depend on Labour winning the next election.
Farage ‘fawning over Putin’
Asked if he is “Nigel Farage is disguise”, given the Reform UK leader has previously vowed to increase defence spending but cut the foreign aid budget, Sir Keir said: “Nigel Farage didn’t even turn up to the debate in parliament today. Nigel Farage is fawning over Putin. That’s not patriotism.
“What I’ve done is take the duty of the prime minister seriously, which is to ensure that our citizens are safe and secure.”
Nigel Farage addresses the Conservative Political Action Conference in Maryland Pic: Reuters
Mr Farage has previously faced criticism for saying the West provoked Russia’s invasion of Ukraine with NATO and the EU’s expansions, and for saying he admired Vladimir Putin as a statesman.
Sir Keir’s announcement comes as Europe reels from a shift in US foreign policy, with the White House making clear it is no longer prepared to bankroll the defence of other NATO members.
Last week also saw an exchange of words between Mr Trump and Ukrainian President Volodymyr Zelenskyy, after officials from Washington and Moscow held peace talks without anyone from Kyiv or Europe present.
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Ukraine war three years on
‘Desertion of leadership’
Sir Keir announced the government would cut back on foreign aid to fund the increase, reducing current spending from 0.5% of GDP to 0.3% – in a move that has angered some charities.
Conservative leader Kemi Badenoch welcomed the measure and said she had written to the prime minister over the weekend to suggest how he could redirect money from the overseas development budget.
But former Tory defence secretary Ben Wallace said an extra 0.2% was “a staggering desertion of leadership”.
“Tone deaf to dangers of the world and demands of the United States,” he wrote on X.
“Such a weak commitment to our security and nation puts us all at risk.”
Elon Musk, chief executive officer of Tesla Inc., in the Oval Office of the White House in Washington on Tuesday, Feb. 11, 2025.
Aaron Schwartz | Bloomberg | Getty Images
Tesla’s post-election pop has almost disappeared.
Shares of the electric vehicle maker plunged by more than 9% on Tuesday, pushing the company’s market cap below $1 trillion and to its lowest since Nov. 7, which was two days after President Donald Trump’s election victory.
The stock has plummeted 25% to start the year, while the Nasdaq is down just 1.3%, and has slid 35% from its record close on Dec. 16. CEO Elon Musk has lost more than $100 billion in net worth over that stretch, though he’s still the world’s richest person, with a fortune valued at about $380 billion.
The latest slide followed a report from Reuters on Monday that Tesla’s long-awaited upgrade to its partially automated driving systems left owners disappointed. Many users told the publication that Tesla’s “navigate on city streets” feature in China fell short of Musk’s promises for self-driving technology.
Other EV makers in China, including BYD, offer their partially automated driving systems for free or a much lower cost. Xiaomi’s popular model SU7 includes the company’s equivalent technology as a standard option for free.
The report out of China added to anxiety amongst Tesla shareholders. Some of the concern has to do with the company’s performance and some is specific to Musk, who is spending much of his time in Washington, DC., leading President Trump’s so-called Department of Government Efficiency (DOGE).
Musk, along with his team in Washington, has gained unparalleled access to government computer systems and taxpayer data, and the president has enabled the billionaire to lead mass firings of workers in agencies tasked with oversight of his companies, including Tesla.
Musk’s extremist political rhetoric and activism has led opponents in various markets to organize protests, including at Tesla stores and service centers. Tesla’s stock dropped earlier this month on Trump’s announced plans for extensive tariffs on goods from Canada, Mexico and China, which came alongside a decline in Tesla vehicle registrations across Europe in January and February.
For the fourth quarter, Tesla reported earnings and sales that missed analysts’ estimates, with automotive revenue dropping 8% from a year earlier and operating income plummeting 23%. In the late January report, the company cited reduced average selling prices across its aging lineup of Model 3, Model Y, Model S and Model X vehicles as a major reason for the decline.
According to the California New Car Dealers Association, Tesla sales dropped 11.6% in the fourth quarter of 2024 in the state, which had been Tesla’s biggest market domestically.
Tesla shares are now about 19% above where they were trading prior to Trump’s victory. Most of what remains of the rally is due to the stock’s 15% jump the day after the election. Musk was a major backer of Trump’s presidential effort, contributing $290 million to Republican candidates and causes in 2024, most of that directed at returning Trump to the White House.
Musk and Tesla didn’t immediately respond to requests for comment.
The Super Micro Computer Inc. headquarters in San Jose, California, US, on Tuesday, Dec. 3, 2024.
David Paul Morris | Bloomberg | Getty Images
Super Micro Computer shares fell as much as 10% during trading on Tuesday as the company nears a deadline to file audited financial reports or be delisted from the Nasdaq exchange.
Earlier this month, Super Micro CEO Charles Liang told investors he was “confident” that the company could file those reports to the U.S. Securities and Exchange Commission by Feb. 25, a deadline set by Nasdaq. The company must file its audited annual report for fiscal 2024 and the first two quarters of fiscal 2025.
If Super Micro fails to file the reports, its stock could be delisted from Nasdaq. It could also ask for another extension of up to 180 days.
Super Micro representatives did not respond to CNBC’s request for comment.
Last fall, Super Micro shares slumped in August after the company delayed releasing its annual report for the year ending in June. Ernst & Young, the company’s auditor, quit citing governance issues in October. Super Micro named BDO as its new auditor in November. The company has also been targeted by an activist short seller, Hindenburg Research, which alleged accounting fraud.
The uncertainty has led to a roller coaster for the stock. It plunged last year to a low of about $18 per share in November after soaring more than 14-fold from the end of 2022 to its peak in March last year. So far in 2025, Super Micro’s stock price has risen more than 55%.
Throughout this saga, Super Micro has risen to a higher level of prominence as its revenue has surged as a result of the boom in artificial intelligence. The biggest driver of Super Micro’s growth is that it sells systems based around Nvidia graphics processing units, or GPUs, needed to build server clusters for AI. Elon Musk’s xAI, for example, buys Super Micro systems.
According to its unaudited financials, Super Micro sales more than doubled in its fiscal 2024 to $14.94 billion. Analysts expect about $5.37 billion in revenue for the current quarter, which would be a nearly 40% increase year over year.
The SEC’s system for accepting filings can receive documents as late as 10 p.m. ET, and depending on how late the filing is made, it can become public the next morning.
— CNBC’s Samantha Subin and Kristina Partsinevelos contributed to this report.
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