Increased UKEF loans aim to help support the rearming of Europe while boosting UK industry 

The UK government will provide GBP10 billion in export finance for domestic defence companies, under a support package outlined by the Chancellor of the Exchequer Rachel Reeves on 14 March. 

As part of the package, the government will expand the lending capacity of UK Export Finance (UKEF) from GBP8 billion to GBP10 billion to help suppliers increase exports. 

UKEF’s Direct Lending facility provides loans to other governments to buy goods and services from the UK to help UK exports grow. 

Outlined during her visit to Scotland, the chancellor’s announcement aims to increase economic growth, support supply chains, boost competitiveness and scale production capacity. 

UK Secretary of State for Defence, John Healey said “British businesses will directly benefit from this increase in lending capacity”, stipulating that “a strong UK defence industrial base is essential for our national security, enabling us to rearm and innovate at a wartime pace”.  

Recent UKEF support has “included an GBP8.8 billion guarantee for exports of air defence systems to Poland, support for the export of Typhoon aircraft to Qatar and support for the sale of ex-Royal Navy minehunting vessels to the Ukrainian Navy,” the government press release notes. 

In 2023, UK defence exports totalled GBP14.5 billion. UK Defence & Security Exports had not replied to DSEI’s request for comment on 2024 figures at the time of publication. 

Alongside an increase in lending power, the statement mentions a need to unblock an existing pipeline of orders and demonstrate the ability of defence to contribute to economic growth. 

This comes as the UK economy shrank by 0.1% in January 2025, partly due to a decline in manufacturing, the UK Office for National Statistics stated on 14 March.