Key events
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Reaction of global financial markets to Greenland crisis so far ‘more muted’ than feared, Bank of England boss tells MPs
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Trump’s comments about Starmer show ‘appeasing a bully never works’, Ed Davey says
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Darren Jones suggests UK unlikely to join Trump’s ‘board of peace’ for Gaza if Putin on it too
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Trump talking ‘silly nonsense’ about Chagos Islands deal, Lib Dems say
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Chagos Islands deal now a done deal, chief secretary to PM, Darren Jones, says
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US speaker Mike Johnson says UK-US ‘special relationship’ will endure, in speech to MPs
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Badenoch says Trump right to say Chagos Islands sovereignty handover ‘terrible policy’
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US, all other Five Eyes allies, and key international partners, all backed Chagos Islands deal, UK government says
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Minister plays down Trump condemning ‘stupidity’ of Chagos deal, claiming PM’s relationship with president ‘is working’
Reaction of global financial markets to Greenland crisis so far ‘more muted’ than feared, Bank of England boss tells MPs
Andrew Bailey, the governor of the Bank of England, has said that the reaction of the global financial markets to the Greenland crisis has so far been “more muted” than he feared. But the Bank is still “very alert” to the risks it poses.
Giving evidence to the Commons Treasury committee this morning, Bailey said:
The level of geopolitical uncertainty and geopolitical issues is a big consideration, because they can have financial stability consequences.
Let me put that in a bit of context in two respects. One, having said that, growth in the world economy was a lot more stable than we thought it would be.
The second point is about financial markets and is a fairly similar point, that we worry considerably about how markets react to those things.
Market reactions have actually been more muted than we would have feared and expected.
Overriding those points, I take neither of those as a point of assurance. We have to be very alert to these things.
Trump’s comments about Starmer show ‘appeasing a bully never works’, Ed Davey says
Ed Davey, the Lib Dem leader, says that Donald Trump’s comments about the Chagos Islands deal show that Keir Starmer’s approach to handling the US president has failed.
This shows Starmer’s approach to Trump has failed. The Chagos Deal was sold as proof the government could work with him, now it’s falling apart.
It’s time for the government to stand up to Trump; appeasing a bully never works.
Darren Jones suggests UK unlikely to join Trump’s ‘board of peace’ for Gaza if Putin on it too
In his Today programme interview Darren Jones, the chief secretary to the PM, was also asked about Donald Trump’s decision to Vladimir Putin to join his proposed “board of peace” for Gaza
Jones said:
The idea that President Putin is a man of peace is clearly not true, and for the birds.
Asked if the UK would join, Jones said the UK had received an invitation to join and was talking to US officials about how it might operate.
Asked if the UK would join a “board of peace” including Putin, Jones said:
I agreed that President Putin is not a man of peace and it would be absurd for him to be on the “board of peace”.
Asked if that meant it would be absurd for the UK or Keir Starmer to be on it if Putin were there too, Jones did not firmly rule this out. But he did say this was why British officials were looking into the idea carefully – hinting strongly that the UK would not join up in those circumstances.
According to Jim Sciutto from CNN, Donald Trump told Keir Starmer that he had received “bad information” about the small troop deployment by some Nato countries to Greenland that took place before he announced sanctions on the Nato countries involved because they are opposed to his plan to buy Greenland.
New: President Trump conceded in a weekend phone call with British PM Keir Starmer that he may have gotten “bad information” on the announcement of troop deployments from European countries to Greenland, according to a senior UK official. UK officials see this concession as a potential path to de-escalation.
The Greenland reconnaissance mission was about protecting Greenland from Russia. But Trump seems to have, wrongly, concluded that it was about protecting Greenland from the US.
At his press conference yesterday, Starmer did not dispute the claim that Trump had been misinformed, but he did not say that explicitly either.
In his interview on the Today programme, asked about the CNN report, Darren Jones, the chief secretary to the PM, also insisted that the troop deployment was about looking at options to defend Greenland from Russia and China. The UK just sent one officer.
But Jones would not comment on what Trump did or did not think was happening.
Trump talking ‘silly nonsense’ about Chagos Islands deal, Lib Dems say
The Liberal Democrats have described Donald Trump’s latest comments about the Chagos Islands deal as “silly nonsense”. Asked about them in an interview on Sky News, Tim Farron, a former Lib Dem leader, said:
We have real concerns about the [Chagos Islands] proposals, and we’ve been challenged them in both the Commons and the Lords.
But Donald Trump was in favour of all that.
This is just all silly nonsense from him, because he’s feeling aggrieved that people are not rolling over when it comes to Greenland.
Farron also said he wanted Keir Starmer to be more robust in his handling of Trump.
The problem I have with Keir Starmer is that he’s still being too weak when it comes to Donald Trump.
Our friends across the Channel are being much stronger. They’re saying they would reciprocate with tariffs.
We know the way to deal with bullies is not to appease them. It’s to stand up to them. Otherwise, you end up being their victims.
Jack Straw, a former Labour foreign secretary, has praised Keir Starmer for the way he is handling Donald Trump. While some opposition parties want Starmer to be more confrontational, Straw told Times Radio that would be a mistake. He said:
The best approach [to handling Trump] that I know of is the one that’s being adopted by our prime minister, Keir Starmer. It’s very hard. It’s very frustrating. I’m sure there have been occasions where Sir Keir has said things to himself in the shaving mirror about Mr Trump that he would not wish to be repeated. But he is an example of how to handle Donald Trump. It is infinitely better than challenging Trump’s ego, to which there is no limit, trying to work around him.
And up to now, the Starmer approach to Trump has succeeded, not least in the fact that, until this latest outburst on Greenland, we did have a much better deal on tariffs than, say, the European Union has had.
Chagos Islands deal now a done deal, chief secretary to PM, Darren Jones, says
Darren Jones, the chief secretary to the PM and Cabinet Office minister, has said that it is too late to undo the Chagos Islands deal.
In a tweet this morning Nigel Farage, the Reform UK leader, claimed that Donald Trump is now vetoing it. (See 9.28am.)
In an interview with Times Radio, Jones said it was a done deal. He explained:
The treaty has been signed with the Mauritian government. So I can’t reverse the clock on that. The treaty has been signed. Parliament has a kind of enabling function on treaties. It’s not like a traditional piece of legislation. So it can’t unwind the treaty having been signed.
US speaker Mike Johnson says UK-US ‘special relationship’ will endure, in speech to MPs
Johnson says he met Keir Starmer yesterday, after Starmer’s speech and press conference about Greenland and the Trump tariffs threat. Johnson says:
When I met with prime minister Starmer at Downing Street yesterday, I told him that I thought his national address a few hours earlier was well done.
He noted, of course, that the UK and the US are close allies and that our strong, constructive partnership all these years has been built on mutual respect and focussed on results. I thought that was exactly the right message and the right tone, and because of that we’ve always been able to work through our differences calmly, as friends. We will continue to do that.
Johnson, a Republican, also says he spoke to Donald Trump at length yesterday.
I told the president that I felt that my mission here today was to encourage our friends and help to calm the waters, so to speak, and I hope to do so.
As the prime minister said yesterday, let us look to agreement, continue our dialogue and find a resolution, just as we always have in the past.
And, in that process, I am confident that we can and will maintain and strengthen our special relationship between these two nations, send a message of unity and resolve to our allies around the world, and remind our adversaries and the terrorists and tyrants everywhere that our nations, that are dedicated to freedom and justice … are stronger and more resolved now than ever before.
Johnson, who is on a visit to mark the 250th anniversary of the US declaration of independence, is now talking about freedom, and the values that inspired the founding fathers.
Mike Johnson has now started his speech. He was introduced by Lindsay Hoyle, the Commons speaker. Johnson said it was always hard following Hoyle because when Hoyle gives a speech “it goes on and on and on”.
MPs will know what he means …
Mike Johnson, the US speaker, is about to give his speech to MPs and peers in the Houses of Parliament. The most prominent overseas speakers (heads of state or government) are invited to speak in Westminster Hall, or the Royal Gallery in the Lords, but Johnson (third in line of succession in the US) is having to make do with a committee room.
There is a live feed here.
Nigel Farage, the Reform UK leader, repeatedly claimed towards the end of 2024, after the UK government first announced its deal to transfer sovereignty of the Chagos Islands, that what was then the incoming Trump administration would not accept it. He ended up looking a bit daft when, at a meeting with Keir Starmer in February 2025, President Trump said he thought the deal was “going to work out very well” and when the US confirmed it was happy with the deal a few weeks later. American approval was crucial at that point because the US is the main user of the Diego Garcia airbase it jointly runs with the UK.
In response to Trump’s U-turn on the Chagos Islands, Farage said this morning:
Thank goodness Trump has vetoed the surrender of the Chagos islands.
Farage may be reading too much into what Trump said. Trump does not have the power to veto the deal very easily now that Mauritius and the UK have finalised terms and, as Jessica Elgot reports in her story, he seems to be criticising the deal not because he wants to overturn it, but because he can use it to try to justify his proposed takeover of Greenland.
Badenoch says Trump right to say Chagos Islands sovereignty handover ‘terrible policy’
The Conservative party has consistently opposed the Chagos Islands deal (even though the negotiations with Mauritius that led to the treaty agreed by Labour first started when the Tories were in office) and Kemi Badenoch has warmly welcomed Donald Trump’s comments. She posted this on social media.
Paying to surrender the Chagos Islands is not just an act of stupidity, but of complete self sabotage.
I’ve been clear and unfortunately on this issue President Trump is right. Keir Starmer’s plan to give away the Chagos Islands is a terrible policy that weakens UK security and hands away our sovereign territory. And to top it off, makes us and our NATO allies weaker in face of our enemies.
Last night I met Speaker Johnson and we are united in that view. Britain’s and America’s interests align. Keir Starmer has the chance to change course on Chagos. Conservatives call on President Trump to reconsider Greenland too.
She also posted a picture of her meeting with Mike Johnson, the US speaker.
Patrick Wintour, the Guardian’s diplomatic editor, says the Trump tweet about the Chagos Islands deal is “a disaster for Starmer and designed to humiliate him the day after Starmer defended the value of the special relationship”.
US, all other Five Eyes allies, and key international partners, all backed Chagos Islands deal, UK government says
The government has issued a statement defending the Chagos Islands deal in the light of the condemnation of it from Donald Trump. (See 8.52am.) A government spokesperson said:
The UK will never compromise on our national security. We acted because the base on Diego Garcia was under threat after court decisions undermined our position and would have prevented it operating as intended in future.
This deal secures the operations of the joint US-UK base on Diego Garcia for generations, with robust provisions for keeping its unique capabilities intact and our adversaries out.
It has been publicly welcomed by the US, Australia and all other Five Eyes allies, as well as key international partners including India, Japan and South Korea.
Minister plays down Trump condemning ‘stupidity’ of Chagos deal, claiming PM’s relationship with president ‘is working’
Good morning. Yesterday, at his press conference in Downing Street, Keir Starmer said he wanted to restrict the amount of time that toddlers spend with their screens. He probably was not thinking of Donald Trump, but Trump’s egotism, greed and lack of self control mean that he is regularly compared to a young child and, within the last couple of hours, on a flight from the US to Davos, he has been glued to his screen, firing off inflammatory posts on his Truth Social network.
For Starmer, the most embarrassing is one criticising the UK’s decision to transfer sovereignty of the Chagos Islands to Mauritius (in return for an agreement that the UK and the US will still be able to use the Diego Garcia military base for at least another 99 years). The Trump administation approved the deal when it was negotiated, accepting the Downing Street argument that this would remove the risk of the UK and the US losing access to Diego Garcia under interntational law. Trump now says this is a sign of “total weakness” and “great stupidity”.
Trump has also been trolling Starmer and other Europeans with renewed calls for the US to annex Greenland.
Here is Jessica Elgot’s story about this.
And there is more coverage of the breakdown of US-Europe relations on our Europe live blog.
Darren Jones, the Cabinet Office minister and chief secretary to the PM, has been giving interviews this morning. Asked about Trump’s Chagos Islands tweet, he played down the significance of it, and insisted that British diplomacy with the US was still “working”.
In an interview with BBC Breakfast, he defended the Chagos Islands deal. He said:
This is the right way to secure the future of the island and I wouldn’t for a second suggest that Britain should be embarrassed or humiliated by any of those decisions.
And, in an interview on the Today programme, asked if Starmer was feeling calm about Trump accusing him of an act of “great stupidity”, Jones replied:
Yes, he is, because the prime minister’s primary duty is to protect British interests. And, as he’s shown repeatedly, he does a pretty good job at doing that, including with President Trump.
Asked if Starmer would just ignore what Trump was saying about issues like Greenland, Jones said the UK disagreed with Trump about Greenland. Asked if Starmer would behave differently in his dealings with Trump in future, Jones replied:
As I say, in the past the prime minister has shown that private, proper British diplomacy can work. We’ve been able to secure deals that protected medicine production in the UK, car manufacturing, we’ve got a trade deal across the line. This put us in the best position of any other country in the world.
And we’ve made progress on military aspects, including in Ukraine.
So the prime minister,has a good track record of this. It’s noisy, I understand that. It’s challenging. It is not normal for geopolitical discussions to be handled in this way. But British diplomacy is working, the prime minister’s relationship is working, and we will continue to do that.
I will post more from the Jones interviews soon.
Here is the agenda for the day.
Morning: Keir Starmer chairs cabinet.
9.30am: Mike Johnson, speaker of the US House of Representatives, gives a speech to MPs and peers in parliament.
10.50am: Andy Burnham, the Greater Manchester mayor, gives a speech to the Institute for Fiscal Studies.
11am: Darren Jones, the Cabinet Office minister and chief secretary to the PM, gives a speech the Institute for Government.
Morning: Kemi Badenoch is on a visit in south-west London.
11.30am: Yvette Cooper, the foreign secretary, takes questions in the Commons.
Noon: Downing Street holds a lobby briefing.
After 12.30pm: Dan Jarvis, the security minister, is expected to make a statement to MPs about the proposed Chinese “super-embassy” in London, which is expected to be approved this morning.
Afternoon: Rachel Reeves, the chancellor, takes speaks at two events at Davos.
Late afternoon: MPs debate Lords amendment to the bill Diego Garcia military base and British Indian Ocean Territory bill, which gives sovereignty of the Chagos Islands to Mauritius.
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