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Defense spending climbs in the UK

February 1, 2023
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Why this is important to Wisconsin businesses: The government’s commitment to upgrade equipment and aircraft creates potential for Wisconsin companies to participate in a wide variety of defense sectors.  

Military spending in the UK is slated for a significant jump in the coming years as the government looks to buy updated equipment and strengthen its digital and cyber capabilities.

The Ministry of Defense announced a plan in late 2022 to invest £1 billion ($1.2 billion USD) over the next two years just to keep up with inflation, according to reports by the Telegraph newspaper and Reuters News Service.

Earlier in 2022, the government unveiled a proposal to spend €238 billion ($259.2 billion USD) for equipment upgrades and support services to bolster its land, sea, and air capabilities.

The UK’s defense sector expects its budget to rise by a compound annual growth rate of more than 2% over the decade 2021-31. In addition to inflation, the UK has a commitment to the NATO transatlantic alliance, whose security needs have increased as a result of Russia’s invasion of Ukraine.

According to NATO, the UK already is one of Europe’s top countries in military spending.

Maritime security is a high priority. Nearly 95% of UK imports and exports move through the more than 400 ports throughout the UK. To guard against the potential for a terrorist attack, illegal smuggling, or threats to critical marine infrastructure, the UK plans to provide the Royal Navy with new ships, submarines, weapons, and technologies. That includes a £1 billion ($1.3 billion USD) investment in equipment such as automated mine hunting systems.

With the UK’s open competition policy, the list of suppliers to the UK military is dominated by UK and U.S. providers. Airbus, Lockheed Martin, BAE Systems, Leonardo, and Thales Group are some of the prominent players in that market.

The UK also plans to invest an additional £8.6 billion ($11 billion USD) in army equipment over the next decade, increasing the country’s army expenditures to more than £41.3 billion ($53 billion USD) over the next 10 years. That will include equipment such as Ajax and Boxer armored vehicles, Challenger 3 battle tanks, AH-64E Apache helicopters, and data capture technologies.

Wisconsin suppliers in the defense industry may find opportunities to supply both the UK and other military suppliers there.

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