, will rise in line with the 2021 spending review, representing a cash boost, according to reports.But it has been suggested this will be devalued by inflation, which is currently at 10%.The Chancellor has warned of a 'tough road ahead' for the UK, with GDP contracting by 0.2%.Jeremy Hunt said on Friday he will be working to make a possible recession 'shallower and quicker' in his highly anticipated autumn budget, which he will unveil on Thursday.Sticking with the 2021 spending review would see the MoD budget increase in cash terms from £47.9 billion this year to £48 billion in 2023 and then £48.6 billion in 2024.Meanwhile, CPI inflation is expected to have risen further last month after hitting a 40-year high of 10.1% in September.The Conservative manifesto in 2019 pledged to 'increase the budget by at least 0.5% above inflation every year of the new Parliament', suggesting failing to add to the planned rise could constitute a breach. Rishi Sunak is said to be preparing to cut defence spending in real terms as planned budget hikes are dwarfed by soaring inflation. Victoria Jones But the Telegraph reported ministers will argue the promise can be met by taking the average annual increase across the five-year period as a whole. A Treasury source said they would not comment on speculation.General Lord Richard Dannatt, the former head of the army, told the newspaper a real terms cut would seem 'incredible' given the situation in Ukraine.'The Government has to cut public expenditure in order to balance the books as it is reluctant to raise taxes, but it does seem incredible that with a land war in Europe it feels it can cut the defence budget,' he said.'Given that we have had 2.5% and 3% waved under defence planners' noses, now to be cutting it to 2% or under, it makes){kind=link}
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Rishi Sunak is said to be preparing to cut defence spending in real terms as planned budget hikes are dwarfed by soaring inflation.
The allowance for all departments, including the Ministry of Defence (MoD), will rise in line with the 2021 spending review, representing a cash boost, according to reports.
But it has been suggested this will be devalued by inflation, which is currently at 10%.
The Chancellor has warned of a “tough road ahead” for the UK, with GDP contracting by 0.2%.