UK to announce extra £2bn in defence funding to support exports and allies

The UK government has committed an additional £2bn to bolster UK defence exporters, aiming to secure more orders from international partners.

This move expands the lending capacity of UK Export Finance (UKEF), the nation's export credit agency, to a total of £10bn.

UKEF's Direct Lending facility offers loans to overseas buyers, enabling them to procure British goods and services.

In the previous year, UKEF granted £8.8bn in loans, aiding 650 exporters and sustaining 41,000 jobs, with funds reaching countries including Poland, Qatar, and Ukraine.

Chancellor Rachel Reeves is expected to unveil the extra funding during her trip to Scotland today, as reported by City AM.

The Treasury has expressed its intention to enhance the competitiveness of the UK's defence sector and support UK exporters in extending their supply chains globally.

Amidst rising global geopolitical tensions that are fuelling defence sector growth, Reeves stated that the UKEF boost will "kickstart economic growth" while also "strengthening our national defence."

The Chancellor remarked: "The world is changing, and we must bring about a new era of security and renewal that protects working people and keeps our country safe.

"This increase to UKEF's lending capability is our Industrial Strategy in action, bolstering our defence industry and supply chains, creating jobs and driving growth across the UK."

This announcement comes on the heels of the government's commitment to elevate defence spending to 2.5 per cent of GDP starting April 2027.

Business Secretary Jonathan Reynolds has articulated support for the defence sector, stating: "This new UKEF lending capability strengthens our support for the sector even further, and will help our defence firms export the best of British expertise abroad while boosting jobs and growth at home."

Scottish Secretary Ian Murray also chimed in with his vision for the nation's security infrastructure: "We are entering a new era for our national defence and Scotland's world class defence industry is playing a big role in meeting that global security challenge."