UK to pump up its defence budget

The U.K. promised to pump an extra £75 billion into its defence budget over the next six years. The move will see the U.K. spend the equivalent of 2.5% of GDP per year on defence by the end of the decade. No.10 Downing Street said: "If all NATO countries committed at least 2.5% of their GDP to defence, our collective budget would increase by more than £140 billion." Downing Street urges 'other major European NATO economies to follow.'

This message comes not only at a time of increasing pressure from Russia on the Ukrainian front but also amidst intensifying discussions about burden-sharing in defense. This move comes ahead of the NATO summit in Washington and particularly before the upcoming presidential elections in the USA.

According to 2023 estimates of defense expenditures, the USA bears a two-thirds share of the total NATO defence expenditure – 68% for the USA and 32% for the rest of NATO. If NATO's long-term goal were to be met – achieving defense expenditures at 2% of GDP by all NATO member countries – this ratio would shift to 63% vs. 37%. If even higher ambitions indicated in the Vilnius communiqué and now specified by the United Kingdom at 2,5% threshold were fulfilled, this ratio could further shift to 59% vs. 41%.

The above calculations use NATO data based on 2015 prices.