By Fatimah Idera
The finance ministry revealed that the government will expand the credit agency UK Export Finance’s (UKEF) direct lending capacity by £2 billion ($2.6 billion), bringing the total to £10 billion.
The additional funding is expected to unlock billions of pounds for UK defence companies that export overseas, driving economic growth and creating jobs across the UK.
This boost comes just weeks after Britain pledged to increase defence spending to 2.5% of GDP by 2027, citing the need for greater security amid global instability and the ongoing war in Ukraine.
“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,” said Finance Minister Rachel Reeves.
“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.”
Reeves is set to officially announce the increase later Friday during a visit to a defence company in Scotland.
Previously, the UK Export Finance agency had a lending capacity of £8 billion specifically for government clients of defence contractors. With this new increase, the total capacity now stands at £10 billion.
Like other European nations, Britain is rushing to enhance its military production capabilities in response to: Russia’s expansionist policies, mounting pressure on European NATO members to increase defence spending, and uncertainty over President Donald Trump’s commitment to protecting Europe under the US-led NATO alliance.
