GERMANY-Sunak Unveils Major Defence Spending Plans On Germany Visit

UK Prime Minister Rishi Sunak has outlined plans for a major increase in gov't spending on defence that would have a significant impact on the UK defence sector as well as the gov'ts fiscal outlook. Sunak pledged that by 2030, 2.5% of the UK's national income would go on defence spending, which would allow a major increase in production of ammo to restock increasingly-barren reserves, as well as develop new military tech. Speaking in Poland on 23 Apr, Sunak announced an additional GBP75bn in military spending that would take the UK's total to GBP87/annum by the end of the decade.

• The main opposition centre-left Labour Party - seen as almost certain to come to power at the next general election - has also committed to hitting 2.5% of GDP on defence spending, but only 'when economic conditions allow', rather than setting a target date.
• Sunak travels to the German capital Berlin on 24 April for the first time since becoming PM in Oct 2022 for talks with Chancellor Olaf Scholz. The German leader is set to pressSunak on offering a more concrete plan for defence spending increases. However, this risks a backlash from the UK, given that it is fairly recently that Germany has significantly ramped up its spending on security following Russia's invasion of Ukraine while the UK has long exceeded the 2% of GDP NATO spending floor.