Britain will spend £4.2 billion ($4.9 billion) on five new frigates from defense giant BAE Systems to bolster security “in the face of increased Russian threats,” Prime Minister Rishi Sunak said Tuesday.
“The UK and allies are taking steps to bolster their security in the face of increased Russian threats,” Sunak said in a Downing Street statement.
“Russia’s actions put all of us at risk. As we give the Ukrainian people the support they need, we are also harnessing the breadth and depth of UK expertise to protect ourselves and our allies. This includes building the next generation of British warships.”
The spending is the next phase in a program under which three vessels are already under construction, and all eight frigates are expected to be completed by the mid-2030s.
In a separate statement, BAE Systems confirmed the order of five more City Class Type 26 frigates.
The British defense giant added that this would sustain 4,000 jobs across the company and the wider supply chain.
“This contract secures a critical UK industry and allows us to build on our long history of shipbuilding as we continue to deliver cutting-edge equipment to the Royal Navy into the next decade,” said BAE chief executive Charles Woodburn.
Tuesday’s announcement came as Sunak condemned Russia’s “barbaric” invasion of Ukraine, in a key speech at the Group of 20 (G20) summit in Bali, Indonesia.
Russian President Vladimir Putin has stayed away, instead sending his foreign minister.
BAE Systems has meanwhile also ramped up its earnings guidance, citing strong orders as a result of the “elevated threat environment” in the wake of the Ukraine conflict.
The group’s share price jumped more than three percent in late morning deals on London’s flat stock market.
“BAE is a beneficiary of today’s geopolitical tension,” noted analyst Olly Anibaba at research consultancy 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.”