UK in talks to join Canada-led defence bank as NATO warns on Russia

The UK government is in discussions about joining a Canada-led investment bank designed to help countries raise more money for defence spending. The proposed Defence, Security and Resilience Bank would aim to lower borrowing costs for military and security projects, according to the supporting material. Treasury officials have said no decision has been made.

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The talks come as NATO Secretary General Mark Rutte is due to make his first meeting with the prime minister during a visit to the UK. He is expected to say the UK is serious about security and to praise its support for Ukraine. He is also expected to say NATO will not be intimidated by Russia's campaign of hostile actions.

The bank has backing from several countries, including Albania, Bulgaria, Belgium, Greece, Latvia, Luxembourg, Romania, Turkey and Ukraine. The supporting row says membership for the UK and other G7 countries would require an upfront investment of about £870m spread over three years. That cost comes as the government weighs how to pay for growing defence commitments ahead of the Budget in October and next year's spending review.

The issue has wider significance because it sits at the intersection of defence finance and alliance security. NATO members have been under pressure to strengthen military production and support for Ukraine while also responding to Russian pressure on the alliance's eastern flank. The row also links the debate to recent security incidents, including a drone shot down over Lithuania and Denmark's accusation that a Russian warship fired emergency flares at one of its helicopters in the Baltic Sea.

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The Defence, Security and Resilience Bank is being led by Canada as part of an effort to create a multilateral lending institution for defence-related projects. The supporting material says the UK's previous chancellor rejected the idea, but the current chancellor is now considering a bid to join. A government spokesperson said the UK was fully committed to working alongside international partners to scale defence industrial capacity.

What remains unclear is whether the UK will decide to join, and if so, when any commitment would be announced. It is also not clear how the government would balance the estimated entry cost against other spending pressures. The NATO chief's visit and speech in Oxfordshire are likely to add further detail on the alliance's view of Russia, Ukraine and defence readiness.

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