Inflation drives UK aid gap

The United Kingdom is projected to miss its own spending goal for international aid by 400 million pounds by the end of 2027, according to new figures released on Sunday. The Center for Global Development, a Washington-based policy organization, calculated that the Treasury’s central forecast implies aid spending will hit only 0.29% of national income. This falls short of the 0.3% target set by the government.

The researchers noted that a 580 million pound shortfall is a plausible outcome under current conditions. Even their most conservative model suggests a gap of 250 million pounds. Ian Mitchell, a senior fellow at the Center for Global Development and co-director of its Europe program, described the figures as material shortfalls in the spending power of UK aid. He stated that closing a 400 million pound gap would allow the government to halve planned cuts to Africa. Those cuts are likely to cost thousands of lives and amount to a de facto UK exit from the south and east of the continent.

Two main factors drive the deficit. Inflation has risen higher than expected, increasing national income beyond what was forecast during the 2025 spending review. A policy change from 2025 affecting the budget of the Foreign, Commonwealth and Development Office also contributed to the gap. The Center for Global Development urged ministers to add funds for international aid in this week’s budget to avoid criticism for missing the target.

The 0.3% goal for 2027 is well below the 0.7% promised in the Labour Party’s election manifesto. Prime Minister Keir Starmer lowered the target to free up money for defence spending. Fleur Anderson, a former minister who sits on the foreign affairs select committee, said she wanted to see higher aid spending in the upcoming budget. She argued that the government should at least hit the reduced target that was set. Anderson added that falling short is not an abstract accounting issue. She pointed to communities without clean water, girls leaving school, undelivered vaccines, and cuts to peace programmes in war zones.

Charities have repeatedly warned that deep aid cuts will damage children’s education and raise the risk of disease and death in some African countries. Figures released by the Foreign, Commonwealth and Development Office in September showed that the cuts under the current government hit the world’s poorest nations hardest. Funding to the least-developed and low-income countries fell by 6.7%, or 118 million pounds. The UK’s overall official development assistance budget dropped to 0.44% of gross national income in 2025, down from 0.5% in 2024. That represents a fall of 987 million pounds.

The government has prioritised funding through multilateral bodies such as the International Development Association, the World Bank’s development arm, and the global vaccines initiative Gavi. It has also kept up humanitarian support. Meanwhile, the Conservatives and Reform UK have pledged to cut aid from about 9 billion pounds a year to 1 billion pounds. That level would leave the UK unable to cover its existing contributions to the UN and World Bank.

A spokesperson for the Foreign, Commonwealth and Development Office said the multi-year aid allocations published in March 2026 set out spending plans and priorities for the next three financial years. Those plans were based on gross national income at the time of the 2025 spending review. The spokesperson said moving to a fixed budget reduces volatility and provides the necessary stability to deliver high-impact aid programmes.