The UK's defence industry is poised for a significant boost following the announcement of a £50 billion Defence Export Fund by UK Export Finance (UKEF). This substantial allocation, equivalent to 62% of the country's annual defence budget, marks the largest expansion in UKEF's history and increases its total financial support capacity to £130 billion. The new fund aims to empower British defence firms to compete more effectively for international contracts and expand their global reach.
The Defence Export Fund is designed to strengthen Britain's competitiveness within a rapidly expanding global defence market, which is projected to grow by 7% annually over the next five years, reaching £400 billion. The initiative will facilitate access to world-leading British defence capabilities and expertise for UK allies, offering a powerful package that combines robust defence sector capabilities with competitive, government-backed financial solutions.
This strategic move builds upon UKEF's recent success in the defence sector, which has seen it support landmark export deals worth over £10 billion in the financial year 2024/25 alone. Such transactions have not only generated jobs but also contributed significant economic value across the UK, with every £1 of UKEF support generating approximately £20 of economic growth.
The government's export credit agency anticipates this trend of growing demand for British defence exports to continue, driven by increasing global tensions and emerging security challenges. The new £50 billion allocation positions UKEF to meet this demand with enhanced confidence and ambition, positioning the UK as a leader in the global defence market.
Tim Reid, CEO of UKEF, highlighted that security is a global strategic priority, and the UK's defence sector offers pioneering capabilities actively sought by allies. He stated that the new financing strengthens the sector's global competitiveness, supports skilled British jobs, and fosters long-term economic growth.
This initiative underscores the UK Government's commitment to bolstering its defence industry and leveraging its expertise on the international stage. By making billions of pounds available in new export financing, UKEF aims to help UK firms secure over £12.5 billion in new export contracts by 2029, further driving economic growth and creating employment opportunities across the country.
Source: UK Export Finance