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In your briefing today:

• Peace talks between the US and Russia have not led to a breakthrough

• Could AI transform the UK economy? One commentator thinks Rachel Reeves is betting the farm on it - with implications for us all

• Wilfried Nancy is in the country, and will (finally) be unveiled as Celtic manager in the next 48 hours

📣 Vladimir Putin has said Russia is “ready” for war with Europe, hours before peace talks between Russia and the US failed to make progress.

The combative comments were made by Putin in an opening statement in which he said “Europe is preventing the US administration from achieving peace on Ukraine”.

“Russia does not intend to fight Europe,” he said, “but if Europe starts, we are ready right now”.

Kremlin aide Yuri Ushakov later said talks with Trump envoy Steve Witkoff and Trump’s son-in-law Jared Kushner had been “rather useful, constructive, rather substantive” but left the two sides “neither further nor closer to resolving the crisis in Ukraine.

“There is a lot of work to be done.” (Guardian) (AP) (BBC)

• The two big reasons Putin won’t agree to the Ukraine peace plan (Sky News)

📣 There’s been a big increase in flu cases across Scotland (you may already be aware). Health boards have been telling patients to treat themselves at home, and avoid A&E departments, which are already over-stretched. (Daily Record)

• One in four doctors say services in their department are “normally unsafe” according to new research by their union, the BMA Scotland. (Scotsman)

📣 Nigel Farage has told donors he expects a deal or merger between his Reform UK party and the Conservatives ahead of the next general election. Farage is reported to have said any deal would have to be on his terms, after a deal with the Tories in 2019 went sour. The Tories are polling at around 17% - around the same as Labour and the Greens - with Reform at 29%. (The FT (£) has the exclusive) (Express)

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AROUND SCOTLAND

📣 “Soaring” levels of immigration have led to an increase in Scotland’s population - despite deaths outnumbering births by 20,000. Scotland’s population hit 5.5 million last year, and is projected to reach 5.8 million by 2047. (Mail)

📣 The City of Glasgow is underperforming by £7.3 billion a year, according to a think tank, and needs a “full devolution deal” and a mayor to unlock its potential. (The Herald has the exclusive)

📣 The biggest-ever space industry event to be held in Scotland kicks off in Glasgow today: Space-Comm Scotland returns to the SECC today. Marking the occasion the UK Space Agency will announce £3.8 million in funding for Scottish Universities. (Space-Comm) (gov.uk announcement)

📣 Is the Batman sequel returning to shoot in Glasgow? The production designer for the planned sequel, has been back in Glasgow. (STV)

AROUND THE UK & WORLD

📣 Hillsborough families have hit out at the “bitter injustice” that no police officers will face disciplinary hearings over their role in the disaster, despite a catalogue of failings set out in a police watchdog report after 14 years of investigations. (Guardian)

📣 MPs have announced an inquiry into the rents paid on all royal homes owned by the Crown Estate, after public outrage at the “peppercorn” rent paid by Andrew Mountbatten-Windsor for the Royal Lodge. (Mail)

• Home truths: Inside the Royals’ huge property portfolio (Sun)

📣 Juries will be scrapped for thousands of cases in England and Wales, the Home Secretary has confirmed. (Independent)

📣 The search for the missing Malaysia Airlines flight, MH370, is to resume, a decade after it vanished in one of aviation’s most mysterious incidents. (Guardian)

📣 A raccoon went on a drunken rampage through a US liquor store in the wee hours of Saturday morning, and was found passed out in the store’s toilet in the morning. (AP)

SPORT

⚽️ Wilfried Nancy is thought to have arrived in Glasgow ahead of an unveiling as Celtic boss in the next 48 hours. He could be in the stands tonight for his new team’s home game against Dundee, and make his debut in the dugout at Sunday’s table-topping clash with Hearts. (Daily Record)

• Martin O’Neill says he’ll be the last man out of Parkhead tonight, as he hands over the reins to Nancy. (Daily Record)

• Celtic have said they are extending their ban on the Green Brigade ultras group indefinitely, until they can be sure the fans will behave themselves. (Sun)

🏉 The draw for the 2027 Rugby World Cup takes place today in Sydney, with 24 nations taking part and an extended (and more complex) format to fit all the sides in. It should, suggests Graham Bean, suit Scotland. (Scotsman)

⚽️ The SFA is looking at plans to turn Lesser Hampden into a shared stadium for Celtic, Rangers and Glasgow City women. (The Herald has the exclusive)

IDEAS
Are Rachel Reeves and Donald Trump betting the farm on artificial intelligence saving their nations’ finances?

🗣️Is Rachel Reeves joining Donald Trump in what American Football enthusiasts might term a “hail Mary pass” - an all-or-nothing bet… on AI? That’s what Fraser Nelson has suggested after reading this OBR paper, released alongside the budget. (You’ll find the relevant passage on pages 45-52).

Long story short, the OBR looks at AI’s impact on productivity - one of Britain’s great problems - and divides that impact into either “substituted” (where AI just does the work, replacing humans) or “complemented” (where humans become more efficient).

Contrary to the popular fear, the OBR sees most work being complemented by AI, not substituted. Which is to say: humans will be augmented, not replaced, by technology. Rather than all be made unemployed by tech, we’ll be made more efficient. That, then, will have a decent impact on productivity: according to the OBR’s “central scenario”, a 2.3% improvement over the next decade.

The real-world impact of that, according to Nelson (£)? “If it happens the tax revenues rise, debt stabilises and chancellors and presidents look like geniuses. If it doesn’t, we enter a doom loop of austerity, job losses and tax rises.”

But the OBR are not tech experts. And there are some who are making an even bigger case for AI. Some say we’ve yet to fully understand the impact of AI, or the capabilities it will soon have.

Given the rapid pace of AI’s development, huge investment and our previous recent experience of technology’s ability to change society, they make the case that we should expect AI development to have an even greater impact.

The beauty of the booster case, and why it’s so seductive to politicians, is that it delivers a vast boost to the economy in the short term. Or, in Nelson’s prose, “the jackpot arrives on precisely the right timetable.

“Cash comes flooding in by the mid-2030s when the British welfare state and Medicare trust funds would be otherwise heading over a cliff. No need to cut welfare, or clear the legalistic weeds that choke growth now. The bots will pay for Trump’s border wall, Keir Starmer’s defence spending pledges and everyone’s retirement.”

You can understand why this vision of the future is so seductive. The only problem? It does tie us down: to a reliance on the promise of a technology class the wider impacts of which we are unsure about, to the methods and motivations of the companies who produce that technology, and to the - sometimes wild - funding arrangements and valuations which underpin those companies.

Suddenly it’s not just our savings which are tied up with the future of these tech companies. The fabric of the state is being bet on tech’s bounty, too.

AI’s promise is, for now says Nelson, “just a story”. But it’s “perhaps the only one standing between Labour and oblivion”. (The Times £)

📣 With all that in mind, I’ll take a look at the question - are we in an AI bubble? - tomorrow.

🗣️ And finally, briefly and somewhat relatedly: a reminder that politics sometimes gets in the way of the future. You might have thought the creeping advent of the electric vehicle (EV) was a done deal. You might even own one yourself. But the EU is eyeing backing down on its 2035 ban on new petrol and diesel cars, because the German car industry is getting badly beaten-up by Chinese competitors

Volvo and Polestar - two Swedish car manufacturers owned by a Chinese company - have warned Brussels that changing the plan is a bad idea. They say the move will actually hand the advantage to Chinese newcomers.

“Pausing 2035 is just a bad, bad idea. I have no other words for that,” Michael Lohscheller, the chief executive of Polestar tells Lisa O’Carroll. “If Europe doesn’t take the lead in this transformation, be rest assured, other countries will do it for us.”

And, if conversations I’m part of are any guide, the market will quickly gravitate to the affordable, gadget-packed, far-eastern EVs, whatever Brussels says. (Guardian)

👍 That’s your Early Line for the day

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