UK's Starmer boosts defence spending on eve of Washington trip

By Sachin Ravikumar and Elizabeth Piper

LONDON (Reuters) - Prime Minister Keir Starmer said on Tuesday he would increase defence spending to 2.5% of GDP every year by 2027, rising to 3% after 2029, a clear signal to U.S. President Donald Trump that Britain will step up its efforts to boost Europe's security.

On the eve of his departure to meet Trump in Washington, Starmer told parliament he was bringing the increase in defence spending forward to offer Europe more support as the U.S. spearheads peace talks with Russia over its war in Ukraine.

With public spending already stretched in Britain, Starmer said the increase would mean a cut to international aid spending, an announcement he said he was not happy to make but one which was necessary to offer Ukraine and Europe support in a "new era".

"Starting today, I can announce this government will begin the biggest sustained increase in defence spending since the end of the Cold War," Starmer said, adding that combined with spending on the intelligence services, it would reach 2.6% from 2027.

"We must go further still. I have long argued that ... all European allies must step up and do more for our own defence," he said, signalling Britain would set a target for spending 3% of gross domestic product in the next parliament, which will convene after a national election due in 2029.

He said the increase would see Britain spending 13.4 billion pounds ($17 billion) more on defence every year from 2027. Britain's defence ministry said it spent 53.9 billion pounds in the 2023/24 financial year.

The international aid budget will be cut from 0.5% to 0.3% in 2027, he said.

Britain last cut its aid budget in November 2020, during the economic crisis resulting from COVID, reducing the level to 0.5% of GDP from 0.7% previously.

Starmer's statement was a clear opening gambit before meeting Trump in Washington later this week, signalling Britain will try to lead other European countries in offering more support to the U.S.-led military NATO alliance - a demand Trump has repeatedly made, suggesting nations should spend 5% of GDP.

Starmer heads to Washington, hoping to reassure Trump that Europe will provide support and security guarantees to Kyiv if peace talks with Russia are successful.

($1 = 0.7901 pounds)

(Reporting by Sachin Ravikumar and Elizabeth Piper, Editing by Kate Holton)