The Government has rejected a think tank’s calculation that the UK’s spending on defence has dipped below the NATO target of 2% of GDP.

The International Institute for Strategic Studies (IISS) had calculated that the UK had spent 1.98% of its GDP on defence in 2016.

It attributed the shortfall to the economy growing faster than defence spending.

But the Ministry of Defence said the figures were "wrong" and insisted that the UK spent 2.21% of GDP in 2016.

"NATO's own figures clearly show that the UK spends over 2% of its GDP on defence," a spokesman said.


"Our defence budget is the biggest in Europe, the second largest in NATO, and it is growing each year as we invest £178bn in new equipment and the UK steps up globally, with new ships, submarines and aircraft over the next decade."

Image: NATO Secretary-General Jens Stoltenberg at a NATO meeting last October

The Ministry pointed out fluctuations in exchange rates, saying "the IISS presents its defence spending in US dollars".

"Gains by the US dollar against sterling in 2016 have skewed the true picture of UK defence expenditure," it said.

Missing the target would be embarrassing for a Government that has repeatedly boasted of its achievement and told other NATO countries they must follow the UK's example.

Theresa May trumpeted the UK's record of hitting the 2% figure during a meeting last month in Washington with Donald Trump, and said after the talks that the US President was "100% behind NATO".

Securing Mr Trump's backing was seen as significant because he had called NATO "obsolete" during the presidential campaign, and has also complained about countries not meeting the spending target.

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The high profile report by IISS was launched a day before a meeting of NATO defence ministers - including the UK's Sir Michael Fallon - in Brussels.

The group said only the United States and two European countries, Estonia and Greece, had achieved the 2% target.

"The UK dipped slightly below this at 1.98%, as its economy grew faster in 2016 than its defence spending," said director general John Chipman.



"Nonetheless, the UK remained the only European state in the world's top five defence spenders in 2016."

But the MoD said that it was for NATO to judge whether member states had met their defence investment pledge.

It pointed to an official assessment released by the military alliance in July last year, in which the UK was one of five countries to meet the 2% target in 2016, along with the US, Greece, Estonia and Poland.

Britain was a driving force behind turning what had previously been a recommended defence expenditure level of 2% into an obligation. The agreement was reached at a NATO summit in 2014.