Nato official: Britain is meeting 2% defence spending benchmark
New Nato figures show that Britain is meeting its target of spending 2% of its GDP on defence, the military alliance has announced.
The announcement came amid a furious row over a think tank's claim - firmly rejected by the Ministry of Defence - that UK spending dipped below the politically sensitive threshold last year.
The International Institute for Strategic Studies put last year's figure at 1.98%, a level that would marginally breach the Government's commitment to meet the Nato target.
Speaking in Brussels, the alliance's secretary general Jens Stoltenberg unveiled figures showing that European members and Canada had between them increased defence spending by 3.8% above inflation last year.
Mr Stoltenberg said the figures were "significantly higher than what we had originally foreseen" and showed Nato had "turned a corner" after many years of steep cuts in spending.
A national breakdown is not due to be released until later in the year, but based on the new data, a Nato official told the Press Association: "According to our calculations, five allies, including the United Kingdom, currently meet or exceed Nato's 2% spending benchmark for 2016."
The 1.98% figure was contained in the IISS annual Military Balance report, unveiled a day before a meeting of Nato defence ministers, including the UK's Sir Michael Fallon, in Brussels.
IISS director-general John Chipman said: "In 2016, only two European Nato states - Greece and Estonia - met the aim to spend 2% of their GDP on defence, down from four European states that met this measure in 2015.
"The UK dipped slightly below this at 1.98%, as its economy grew faster in 2016 than its defence spending."
The think tank calculated that Britain fell short by around £380 million (500 million US dollars) in 2016, out of a budget recorded as £39.8 billion by Nato and £36.9 billion by the United Nations.
But the MoD branded the figures "wrong", pointing to official Nato statistics from last July which put the UK's defence spending for 2016 at 2.21% of GDP.
A Ministry of Defence spokesman said: "These figures are wrong: Nato's own figures clearly show that the UK spends over 2% of its GDP on defence.
"Our defence budget is the biggest in Europe, the second largest in Nato, and it is growing each year as we invest £178 billion in new equipment and the UK steps up globally, with new ships, submarines and aircraft over the next decade."
The MoD said the IISS calculation may have been affected by fluctuations in exchange rates, as the think tank presents spending figures in US dollars - which rose sharply against sterling in 2016 in the wake of the referendum vote for Brexit.
And the think tank acknowledged that the precise figure was dependent on varying definitions of military expenditure and different calculations of GDP and exchange rates.
The IISS questioned the "increasingly prominent" role of the 2% figure in political debate, arguing that the real yardstick should be "how these tremendous sums of money concretely translate into cohesive defence capabilities across the Alliance" and insisting: "Ultimately, it is the output that matters."
Although the shortfall claimed by the IISS is small, it has the potential for political embarrassment, as the UK has repeatedly urged other Nato members to meet the 2% target.
Prime Minister Theresa May trumpeted the UK's record of hitting the 2% figure during her recent visit to Washington to meet US President Donald Trump, who has complained of European Nato members failing to pay their fair share for collective defence arrangements.
Shadow defence secretary Nia Griffith said the report had exposed a "complete and shocking failure" by the Government to meet its defence spending commitment.
"To be spending less than 2% of GDP on defence is utterly unacceptable, particularly in this time of immense global uncertainty," said Ms Griffith.
"Labour is committed to spending at least 2% of our GDP on defence spending, as we consistently did when in government."