According to Prime Minister Rishi Sunak, Britain will spend £4.2 billion ($4.9 billion) on five new frigates from defence giant BAE Systems to bolster security “in the face of increased Russian threats.”
Sunak stated in a Downing Street statement that “the UK and allies are taking actions to reinforce their security in the face of heightened Russian threats.”
“Russia’s actions endanger us all. While providing the assistance the Ukrainian people require, we are also utilising the breadth and depth of UK expertise to safeguard ourselves and our friends. This includes constructing the newest British warships.
The funding is the next stage of a programme that will see the completion of all eight frigates by the middle of the 2030s. Three ships are currently being built under the programme.
Five additional City Class Type 26 frigates were ordered, according to a different announcement from BAE Systems.
According to the British defence industry behemoth, this would support 4,000 jobs at the company and throughout the larger supply chain.
“This contract secures a critical UK industry and allows us to build on our long history of shipbuilding as we continue to provide the Royal Navy with cutting-edge equipment into the next decade,” said BAE Chief Executive Charles Woodburn.
Sunak, who delivered a pivotal speech at the Group of 20 (G20) summit in Bali, Indonesia, on Tuesday, blasted Russia’s “barbaric” invasion of Ukraine.
Vladimir Putin, the president of Russia, sent his foreign minister in place of himself.
In the meantime, BAE Systems has also increased its earnings forecast, citing strong orders as a result of the “elevated threat environment” following the situation in Ukraine.
In late morning trades on London’s quiet stock exchange, the group’s share price increased by more than three percent.
The geopolitical tension of today benefits BAE, according to analyst Olly Anibaba of research firm Third Bridge.
“Our experts expect US and European defence budgets to continue to grow over the next 2-5 years. The Russia-Ukraine conflict is a wake-up call for many European countries.”