Read our Privacy noticeHigher defence spending amid global conflicts is delivering a boost to Rolls-Royce and BAE Systems as the FTSE 100 stalwarts upgraded their annual outlooks after solid half-year figures. It now expects to post underlying operating profits of £4.7 billion to £4.9 billion for 2026, up from previous guidance for between £4 billion and £4.2 billion. open image in gallery BAE Systems CEO Charles Woodburn recently warned over UK defence spending (Andrew Matthews/PA) ( PA Archive )The group is benefitting from higher global defence spending, adding to greater civil aerospace demand and as rapid AI data centre rollouts bolster its power systems division. open image in gallery New Chancellor John Healey (Stefan Rousseau/PA) ( PA Wire )New Prime Minister Andy Burnham has said he wants to increase defence spending, though he has yet to commit to 3% of national income by 2030. BAE’s chief executive Charles Woodburn recently warned that defence spending in the UK “falls well short” of what is required.