UK boosts defence firms with GBP2 bil loans for allies

London: The UK announced it would provide loans totaling GBP2 billion ($3.46 billion) to allied governments to buy from British defence companies, the latest move by a European nation to boost investment in military capabilities under pressure from US President Donald Trump.

UK Export Finance’s direct lending capacity would be raised to GBP10 billion from GBP8 billion, with the extra money being targeted toward British defence firms exporting missiles, aircraft and armoured vehicles, the Treasury said in an emailed statement.

The uplift would be a central pillar of the government’s upcoming Defence Industrial Strategy, according to the statement.

Chancellor of the Exchequer Rachel Reeves will travel to Scotland to make the announcement. “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,” she said.

Scotland hosts facilities of several UK defence companies including BAE Systems and Babcock.