Can the UK Afford to Defend Itself Anymore?
At the North Atlantic Treaty Organization summit scheduled for later this month, alliance members are expected to adopt a new defense spending target totaling as much as 5% of each nation's gross domestic product, an historic acknowledgement that a new Cold War has arrived, and that a recalcitrant Donald Trump could one day leave Europe to the mercies of a revanchist Vladimir Putin.
Indeed, NATO's sprint toward re-militarization comes after more than three years of Russian war that's claimed tens of thousands of Ukrainian lives. Unable to rely on America given Trump's expressions of warmth for Putin and coolness to allies, many European governments see shifting to a war-footing as arguably a matter of long-term survival. The short-term question, however, is how to pay for it. On this Bloomberg Originals mini-documentary, we explore this brutal conundrum as it is currently faced by one of NATO's key powers: the UK.
In 2010, the UK had a relatively small military of about 100,000 personnel. In the 15 years since, that number has fallen by tens of thousands. The Labour government is now struggling to make up for decades of underinvestment. Prime Minister Keir Starmer has pledged to spend 2.6% of GDP on defense by 2027, which falls short of the 3.5% goal proposed by NATO Secretary General Mark Rutte and the soon-to-be 5% target. The British military is currently at its smallest size since the Napoleonic era, and reversing course would require sustained investment and major sacrifices. Given the delicate nature of the UK's finances and the bond markets, it may not even be possible.
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