Rachel Reeves has announced plans to loan more than £2bn worth of frozen Russian assets to fund weapons in Ukraine as the prime minister warns that we are at a “turning point” in the war.
It comes ahead of a major summit in London on Sunday where European leaders will meet to thrash out a response to Donald Trump’s erratic stance on Ukraine and his catastrophic meeting with Volodymyr Zelensky on Friday.
The £2.26bn package will be given to Ukraine as a loan and will be paid back using profits generated on sanctioned Russian sovereign assets.
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The formal agreement was signed by Ms Reeves and Ukrainian finance minister Sergii Marchenko on Saturday, with the first tranche of funding expected to reach Kyiv later next week.
The loan – which will be earmarked for military spending to bolster Ukraine’s defences - forms part of the UK’s contribution to the G7 Extraordinary Revenue Acceleration (ERA) Loans to Ukraine scheme, through which G7 countries will collectively provide $50bn to support Ukraine.
Announcing the package of support, Ms Reeves said a “safe and secure Ukraine is a safe and secure United Kingdom”.
“This funding will bolster Ukraine’s armed forces and will put Ukraine in the strongest possible position at a critical juncture in the war.”
The funding, which will be delivered in three equal annual payments of £752m, comes on top of the £3bn a year commitment by the UK to provide military aid for Ukraine.
It follows Sir Keir Starmer’s announcement last week that the UK will boost its own defence spending to 2.5 per cent of GDP by 2027, up from 2.3 per cent.
European leaders will meet in London on Sunday to thrash out a response to a chaotic meeting between Mr Trump and Mr Zelensky, which shook the foundations of the transatlantic Nato alliance.
Sunday’s meeting will also involve crunch talks on how European nations can boost their defence spending to bolster their own security and reduce their reliance on the US.
Meanwhile, Downing Street is hoping Sir Keir can be the one to bridge the gap and bring the US and Ukraine back to the negotiating table.
It comes after a clash between Mr Trump and Volodymyr Zelensky in the Oval Office on Friday, in which the US President claimed his counterpart was “gambling with world war three”.
It resulted in Ukraine’s president being kicked out of the White House, and a deal to exchange mineral rights for further US military support placed on ice.
Reports in the US media suggested Mr Trump was even considering halting all aid to Kyiv after the meeting, in which he and his vice president, JD Vance, engaged in heated exchanges with Mr Zelensky.
The Ukrainian president is expected to meet King Charles at his Sandringham estate in Norfolk on Sunday, after attending the summit.
The embattled Ukrainian leader will meet with Charles days after Mr Trump was offered an unprecedented second state visit to the UK as part of a charm offensive aimed at winning the US president’s support.
