The UK government has announced a significant increase in export credit support for defense manufacturers, injecting an additional £2 billion ($2.6 billion) into the sector to bolster overseas sales.
This move is designed to unlock billions of pounds in funding for UK defense companies, driving economic growth and creating jobs across the nation.
With the new funds, the UK’s Export Finance agency will now have a total lending capacity of £10 billion, up from £8 billion previously allocated to government clients of defense contractors.
The decision comes as part of Britain’s broader strategy to ramp up military production in response to growing security challenges, including Russia’s expansionist ambitions, mounting pressure on NATO members to enhance defense spending, and uncertainties regarding the US’s commitment to protecting Europe under President Donald Trump’s leadership.
Prime Minister Keir Starmer, ahead of his February visit to the White House, reaffirmed the government’s intention to increase defense spending, pledging to reach 2.5% of the UK’s GDP by 2027, with plans to boost it further to 3.0% in the next parliamentary term.
Chancellor of the Exchequer Rachel Reeves emphasized the urgency of the situation, stating, “The world is changing, and we must usher in a new era of security that both protects our people and ensures the safety of our nation.”
