To ask the Secretary of State for Defence, what assessment his Department has made of the effect of currency depreciation in defence procurement on the defence budget.

We address the impact of foreign exchange using forward purchase contracts agreed with the Bank of England. Foreign Currency Exchange hedging is layered over a number of years which means that by the start of the year, a significant proportion of the forecast foreign currency requirement has already been purchased. The layering approach mitigates the risk of over or under hedging and provides budget stability in the forward programme. It is not intended to generate gains or savings from the foreign exchange market.