The US administration is criticising foreign digital regulations affecting major online platforms while avoiding trade measures that could disrupt the US economy. Officials say the rules disproportionately impact American technology companies.
US officials have paused or cancelled trade discussions with the UK, the EU, and South Korea. Current negotiations are focused on rolling back digital taxes, privacy rules, and platform regulations that Washington views as unfair barriers to US firms.
US administration officials describe the moves as a negotiating tactic rather than an escalation toward tariffs. While trade investigations into digital practices have been raised as a possibility, officials have stressed that the goal remains a negotiated outcome rather than a renewed trade conflict.
Technology companies have pressed for firmer action, though some industry figures warn that aggressive retaliation could trigger a wider digital trade war. Officials acknowledge that prolonged disputes with major partners could ultimately harm both US firms and global markets.
Despite rhetorical escalation and targeted threats against European companies, the US administration has so far avoided dismantling existing trade agreements. Analysts say mounting pressure may soon force Washington to choose between compromise and more concrete enforcement measures.
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The European Commission has renewed its two adequacy decisions allowing the continued free flow of personal data between the European Union and the United Kingdom. The decision confirms that UK data protection rules remain essentially equivalent to EU standards.
The adequacy findings cover both the General Data Protection Regulation and the Law Enforcement Directive, enabling personal data to move freely between the European Economic Area and the UK without additional safeguards.
In June 2025, the Commission adopted a temporary six-month extension after the original decisions were due to expire, allowing time to assess changes introduced by the UK’s Data (Use and Access) Act.
The renewal follows a positive opinion from the European Data Protection Board and approval from EU member states through the comitology procedure, completing the formal adoption process.
The renewed decisions include a six-year sunset clause, running until December 2031. A joint review by the Commission and the European Data Protection Board is scheduled after four years.
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Bank of England Governor Andrew Bailey said the widespread adoption of AI is likely to displace workers from existing roles, drawing parallels with the labour disruption caused by the Industrial Revolution.
He emphasised that while AI can boost productivity and economic growth, the UK must invest in training and education to help workers transition into jobs that are AI-enabled.
Bailey expressed particular concern about the impact on younger and inexperienced workers, warning that AI may reduce entry-level opportunities in sectors such as law, accountancy and administration. He noted that firms may hire fewer junior staff as AI systems replace routine data and document analysis.
Despite these risks, Bailey described AI as a potential driver of future UK growth, although he cautioned that productivity gains may take time to materialise.
He also stated that the Bank of England is experimenting with AI internally while monitoring concerns about a potential AI market bubble and the risks of a sharp valuation correction.
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Britain plans to banAI-nudification apps that digitally remove clothing from images. Creating or supplying these tools would become illegal under new proposals.
The offence would build on existing UK laws covering non-consensual sexual deepfakes and intimate image abuse. Technology Secretary Liz Kendall said developers and distributors would face harsh penalties.
Experts warn that nudification apps cause serious harm, mainly when used to create child sexual abuse material. Children’s Commissioner Dame Rachel de Souza has called for a total ban on the technology.
Child protection charities welcomed the move but want more decisive action from tech firms. The government said it would work with companies to stop children from creating or sharing nude images.
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The UK Foreign, Commonwealth and Development Office was hacked in October, according to minister Chris Bryant. Officials say there is a low risk to any individual from the breach.
Reports suggest that a Chinese group, Storm 1849, may have been involved, but Bryant cautioned that the perpetrator has not been confirmed. Tens of thousands of visa details could have been targeted, though the exact scope remains unclear.
The attack shares similarities with a 2024 campaign called ArcaneDoor, linked to state-sponsored actors. Cybersecurity experts warn that the incidents may be connected and highlight risks of large-scale data targeting.
Officials have quickly closed the vulnerability and continue to investigate the matter. Bryant emphasised that speculation is unhelpful and said the investigation could take some time to identify the responsible party.
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For the first time, the UK has published a detailed, evidence-based assessment of frontier AI capabilities. The Frontier AI Trends Report draws on two years of structured testing across areas including cybersecurity, software engineering, chemistry, and biology.
The findings show rapid progress in technical performance. Success rates on apprentice-level cyber tasks rose from under 9% in 2023 to around 50% in 2025, while models also completed expert-level cyber challenges previously requiring a decade of experience.
Safeguards designed to limit misuse are also improving, according to the report. Red-team testing found that the time required to identify universal jailbreaks increased from minutes to several hours between model generations, representing an estimated forty-fold improvement in resistance.
The analysis highlights advances beyond cybersecurity. AI systems now complete hour-long software engineering tasks more than 40% of the time, while biology and chemistry models outperform PhD-level researchers in controlled knowledge tests and support non-experts in laboratory-style workflows.
While the report avoids policy recommendations, UK officials say it strengthens transparency around advanced AI systems. The government plans to continue investing in evaluation science through the AI Security Institute, supporting independent testing and international collaboration.
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Former UK chancellor George Osborne has joined OpenAI in a London-based role. He will lead the OpenAI for Countries programme focused on government partnerships.
The initiative aims to help governments build AI capacity and ensure systems reflect democratic values. OpenAI says more than 50 countries are already involved.
Osborne will work on developing AI infrastructure, boosting AI literacy and improving public services. The role follows discussions with OpenAI chief executive Sam Altman.
His appointment comes as UK-US tech talks face setbacks and investment in AI accelerates. Against this backdrop, financial authorities have warned of risks linked to the sector’s rapid growth.
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The UK government has formed a Women in Tech taskforce to help more women enter, remain and lead across the technology sector. Technology secretary Liz Kendall will guide the group alongside industry figures determined to narrow long-standing representation gaps highlighted by recent BCS data.
Members include Anne-Marie Imafidon, Allison Kirkby and Francesca Carlesi, who will advise ministers on boosting diversity and supporting economic growth. Leaders stress that better representation enables more inclusive decision-making and encourages technology built with wider perspectives in mind.
The taskforce plans to address barriers affecting women’s progression, ranging from career access to investment opportunities. Organisations such as techUK and the Royal Academy of Engineering argue that gender imbalance limits innovation, particularly as the UK pursues ambitious AI goals.
UK officials expect working groups to develop proposals over the coming months, focusing on practical steps that broaden the talent pool. Advocates say the initiative arrives at a crucial moment as emerging technologies reshape employment and demand more inclusive leadership.
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The third UK-EU Cyber Dialogue was held in Brussels on 9 and 10 December 2025, bringing together senior officials under the UK-EU Trade and Cooperation Agreement to strengthen cooperation on cybersecurity and digital resilience.
The meeting was co-chaired by Andrew Whittaker from the UK Foreign, Commonwealth and Development Office and Irfan Hemani from the Department for Science, Innovation and Technology, alongside EU representatives from the European External Action Service and the European Commission.
Officials from Europol and ENISA also participated, reinforcing operational and regulatory coordination rather than fragmented policy approaches.
Discussions covered cyber legislation, deterrence strategies, countering cybercrime, incident response and cyber capacity development, with an emphasis on maintaining strong security standards while reducing unnecessary compliance burdens on industry.
Both sides confirmed that the next UK-EU Cyber Dialogue will take place in London in 2026.
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Libraries Connected, supported by a £310,400 grant from the UK Government’s Digital Inclusion Innovation Fund administered by the Department for Science, Industry and Technology (DSIT), is launching Innovating in Trusted Spaces: Libraries Advancing the Digital Inclusion Action Plan.
The programme will run from November 2025 to March 2026 across 121 library branches in Newcastle, Northumberland, Nottingham City and Nottinghamshire, targeting older people, low-income families and individuals with disabilities to ensure they are not left behind amid rapid digital and AI-driven change.
Public libraries are already a leading provider of free internet access and basic digital skills support, offering tens of thousands of public computers and learning opportunities each year. However, only around 27 percent of UK adults currently feel confident in recognising AI-generated content online, underscoring the need for improved digital and media literacy.
The project will create and test a new digital inclusion guide for library staff, focusing on the benefits and risks of AI tools, misinformation and emerging technologies, as well as building a national network of practice for sharing insights.
Partners in the programme include Good Things Foundation and WSA Community, which will help co-design materials and evaluate the initiative’s impact to inform future digital inclusion efforts across communities.
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