Originally Posted by
Frostchamber
I'm no mathematician so happy to be corrected, but I think GDP would need to collapse by something like 25% in order for 3% of GDP not to represent a real increase in defence spending over 2.2%. By comparison, the 2008 financial crisis resulted in a GDP reduction of a little over 6%. Of course any GDP reduction would trim the size of the spending increase, but if my rusty o-level maths is anywhere near correct we'd be approaching Mad Max territory before it wiped it out completely.
A lot of defence equipment is essentially priced in US dollars, much as oil and most major commodities are. In May 2015 when the Brexit referendum became law the GBP/USD rate was approx 1.55. It is now (23-Sep-2022) only 1.10. That is 0.45/1.55 =
29% reduction on what it was. This exceeds 25%, and to quote your own words is therefore a
"max Max outcome" in the UK's ability to fund stuff priced in USD. The UK is reaping what Brexit voters have sown, and it is likely to get far worse before - if ever - it gets better. The defence budget implications ought to be obvious. At the same time the UK has seriously $%%^-off all the local partner nations with whom it has shared costs for the last 70-years, and is instead shopping around (quite successfully) for new partners to foot the bill in Australia and Japan (well at least initial indications are promising).
https://www.poundsterlinglive.com/history/GBP-USD-2015
https://www.theguardian.com/uk-news/...-pound-crashes