United Kingdom Defence and Security Report 2015
BMI view: We expect the UK's defence budget to continue increasing in absolute terms in the next fiveyears. This will be driven by the government's commitment to compensate the reduction in personnelforeseen in the 'Army 2020' strategy with an armed force equipped with the latest and highest qualityequipment. As the UK will continue to rely on imports for a large share of the equipment and capabilities itsupplies to its troops, we believe opportunities for both national and international companies will continueto emerge. However, constraints on the defence budget, as the country continues its road towards recovery,may place some restrictions on the development of the country's defence market.
The Strategic Defence and Security Review (SDSR) that was published by the UK government in 2010foresaw significant reductions in the defence budget for the following years and suggested that these besupported by a reduction in the number of personnel in three branches of the country's armed forces, that is,the Airforce, the Navy and the Army. Within this context, the 'Army 2020' strategy was elaborated, whichforesaw a reduction in the armed forces personnel to 82,000 while increasing the number of reserves to30,000. The planned reductions, the strategy continues, will have to be compensated by providing bettertraining to the reserves and, most importantly, by ensuring that the armed forces are equipped with the mostup-to-date equipment and capabilities.
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