The writer is director of Chatham House, the international relations think-tank
Don’t tell Rachel Reeves, but the UK may have to borrow more to pay for the defence spending it so urgently needs. In the next year and beyond, politicians will have to brace themselves to reclaim money through cuts to sickness benefits, pensions and healthcare, with all the threats to electoral survival that implies.
But right now? Other than swingeing spending cuts or tax rises that the chancellor has promised she won’t make, there is not much alternative to borrowing. Sir Keir Starmer’s government may join its European counterparts in discussions of whether special new defence banks or bonds might let them do this without spooking the capital markets. (The subject of increasing defence spending was on the agenda at an emergency summit convened by French President Emmanuel Macron on Wednesday.)