Defence budget will limit spending review, says IFS

Spending commitments on defence mean it is impossible” for the chancellor to invest in economic growth, public services and net zero policies when she allocates money for the next three years, leading economists have warned.

- KATE DEVLIN

Rachel Reeves will face “unavoidably” tough choices as she set out her plans in a spending review in just over a week, the Institute for Fiscal Studies (IFS) says.

The government has pledged to increase defence spending to 2.5 per cent of GPD within the next two years.

But yesterday, ahead of the launch of a new defence strategy tomorrow, the defence secretary John Healy went further as he said there was “no doubt” the UK would meet its target to raise the level to 3 per cent by 2034.

The IFS said the spending review would be dominated by money for defence and the NHS. Its research economist Bee Boileau said funding for other priorities will likely slow to a "trickle".