Prime minister announces increase in defence spending

The development of technologies such as AI, quantum and space capabilities for defence has been given a boost by a rise in UK defence spending.

UK defence spending will rise to 2.5 per cent of GDP from April 2027
UK defence spending will rise to 2.5 per cent of GDP from April 2027 - AdobeStock/pcruciatti

Announced yesterday (February 25, 2025) by PM Keir Starmer, UK defence spending will rise to 2.5 per cent of GDP from April 2027 and 2.6 per cent in the same period after factoring in the cost of intelligence services. Starmer said this represents a year-on-year increase of £13.4bn.

Starmer also set an ambition to spend three per cent of GDP on defence in the next parliament, dependant on economic and fiscal conditions.

“We can use this investment to rebuild Britain’s industrial base,” he said. “We will make sure this investment maximises British jobs, British growth, British skills and British innovation.” 

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The rise in for the defence budget comes at a cost to Overseas Development Assistance (ODA), which will be cut from 0.5 per cent to 0.3 per cent of Gross National Income (GNI). The government said it remains committed to reverting spending on overseas aid to 0.7 per cent of GNI when the fiscal conditions allow.

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