Public appetite for a new series of UK government defence bonds is conditional on financial incentives rather than national sentiment, according to a report by ThisisMoney.
The outlet cited new polling indicating that British investors would only participate in a potential war bond issuance if it came with specific tax perks, such as exemption from capital gains or income tax.
The renewed discussion suggests the Treasury is exploring alternative revenue streams to support the nearly $20 billion military spending increase confirmed earlier this year.
The prospect of a dedicated defence bond issue marks a shift in the Treasury's financing strategy.
The UK government had previously ruled out issuing war bonds or cutting welfare benefits to fund a significant increase in military expenditure, opting instead to reduce budgets across multiple civilian departments.
The renewed discussion suggests the Treasury is exploring alternative revenue streams to support the nearly $20 billion military spending increase confirmed earlier this year.
For fixed-income investors, the introduction of tax-advantaged sovereign debt would alter the relative value proposition of UK gilts.