Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Cuts to overseas aid by the UK are set to go further and faster than those made by the Trump administration in the US, as Sir Keir Starmer’s government wrestles with funding pressures.
The UK will cut overseas aid spending by about 27 per cent in 2026-27 compared with 2024-25, while the US reductions are expected to be 23 per cent lower in 2026 than in 2024, as Congress has this month blunted parts of the steep cuts proposed by the President.
The analysis by the Center for Global Development comes as the scale of UK aid cuts accelerates following a decision a year ago to reduce overseas development spending to 0.3 per cent of Gross National Income, from 0.5 per cent.
It shows that the UK aid cuts between 2024 and 2026 will be the steepest of any G7 country.
The cuts were first announced to provide additional funding for military spending from 2027 to help counter the aggression of Russian President Vladimir Putin.
But the scale of the cuts may cause particular embarrassment for a centre-left Labour government that has historically backed higher aid spending.
Since returning to the White House in 2025, Donald Trump has slashed the main foreign aid body, the US Agency for International Development (USAID), decrying its spending as “wasteful”.
His administration has said much development aid has been “funnelled to radical, leftist priorities, including climate change, diversity, equity, and inclusion (DEI), and LGBTQ activities around the world”.
But last week Trump signed a spending bill approved by Congress that — while still including significant cuts — was less aggressive than initially proposed by his administration and included $50bn of foreign aid in 2026.
“Congress has managed to significantly reduce the budget cuts proposed by the Trump administration,” said Ian Mitchell, co-director of the Europe programme at the CGD.
“By comparison we’ve seen very little pushback in the UK parliament at all, though once the cuts start to become a reality we might expect to see more opposition emerge.”
The CGD analysis stripped out certain components of US aid funding such as military support for Egypt, Israel and Taiwan to provide a like-for-like comparison with UK aid spending.
It also excludes UK aid spending spent domestically for housing asylum seekers, though including that would not materially alter the trajectory of the numbers, the CGD said.
Anneliese Dodds, UK minister for development when the cuts were announced in February 2025, resigned just days later saying they would “remove food and healthcare from desperate people” and harm the UK’s reputation internationally.
But while there has been sporadic criticism from backbench Labour MPs, the Liberal Democrats and the Greens, the aid cuts have only faced limited opposition while the UK grapples with both tight finances and turmoil within the Labour Party.
Some commentators expect Starmer’s government to drift leftward in the coming months as he tries to reinforce his standing in the party following a number of threats to his leadership and the departure of his chief aide, Morgan McSweeney.
The Foreign, Commonwealth and Development Office did not respond to a request for comment.