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Economy February 16, 2026

UK Considers Speeding Up Plan to Raise Defence Spending to 3% of GDP

Advisers weigh options to reach a higher defence target before the current parliamentary term ends amid rising costs and budget trade-offs

By Sofia Navarro
UK Considers Speeding Up Plan to Raise Defence Spending to 3% of GDP

The UK government is considering moving more quickly to increase defence expenditure to 3% of gross domestic product, with advisers to the prime minister examining ways to achieve the target ahead of the previously stated timetable. No decision has been taken, but officials acknowledge that current plans do not fully cover escalating defence costs. NATO data and government moves to reallocate funds underline the fiscal trade-offs involved.

Key Points

  • UK advisers are examining options to reach defence spending of 3% of GDP before the current parliamentary term ends - sectors affected include defence contractors and public finance.
  • The government previously pledged 2.5% of GDP by 2027 with an ambition to reach 3% in the post-2029 parliament; NATO data shows the UK spent 2.3% of GDP on defence in 2024 - relevant to fiscal planning and bond markets.
  • To fund the move toward higher defence spending the government cut the overseas aid budget last year, illustrating trade-offs across public spending priorities and implications for international aid recipients and government departments.

The UK government is exploring whether to accelerate its plan to lift defence spending to 3% of national output, according to reporting from the BBC. The review comes about a year after ministers set an earlier timetable for higher defence expenditure.

In February of last year the government pledged to raise annual defence spending to 2.5% of GDP by 2027, and signalled an ambition to reach 3% in the parliament that would follow the 2029 general election. Advisers to Prime Minister Keir Starmer are now reported to be studying options to achieve the 3% target before the current parliamentary term expires.

Officials have not made a final decision. Those involved in the review acknowledge that the spending commitments already on the table will not fully meet rising defence costs, prompting the fresh look at timing and funding.

Speaking at the Munich Security Conference on Saturday, the prime minister said Europe had come together in supplying weapons and ammunition to Ukraine, and added that "it is clear that we are going to have to spend more faster." The remark underlined the rationale officials are giving for potentially bringing forward higher defence outlays.

NATO figures show the UK spent 2.3% of GDP on defence in 2024. To make room in the public finances for a rise toward the 2.5% commitment, the government cut its overseas aid budget last year, reflecting the fiscal pressure of higher defence ambitions on other spending priorities.

The government has not published a long-term defence investment strategy that lays out spending priorities, a gap that has irritated leaders in the defence industry. The Office for Budget Responsibility estimated last year that moving defence spending up to 3% of GDP would require an extra 17.3 billion in the 2029-2030 fiscal year.

The reported internal review of timing highlights the tension between growing defence needs and constrained public finances. Ministers face choices about sequencing, funding sources and the trade-offs implied for other areas of the budget as they weigh whether to speed the path to 3%.

Risks

  • Uncertainty over final policy decisions leaves defence industry planning and long-term procurement strategies exposed - defence firms and suppliers face timing risk.
  • Raising defence spending to 3% would require substantial additional funding, with the Office for Budget Responsibility estimating an extra 17.3 billion in 2029-2030, creating pressure on public finances and potential impacts on borrowing or other spending areas.
  • The absence of a published long-term defence investment strategy increases uncertainty about spending priorities and could complicate capital allocation decisions within the defence sector and related supply chains.

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