- The cap on the UK’s nuclear arsenal is set to increase
- More than £6bn will be invested in next-generation R&D
Benefitting from the stability of long-term government contracts and robust demand, defence companies’ earnings have proved relatively resilient in the face of Covid-19 – at least for those with limited exposure to commercial aerospace.
Yet investors have been wary of buying into defence stocks over the past year amid concerns that government spending across the world will be curtailed post-pandemic. In the UK, there has been additional uncertainty as we awaited the outcome of the integrated review of security, defence, development and foreign policy.