LONDON Britain's defence spending last year dipped just below the NATO military alliance's target of 2 percent of gross domestic product, the International Institute for Strategic Studies said on Tuesday.
The government disputed the figures, saying NATO's own data showed it had spent 2.21 percent of GDP on defence last year.
Britain has previously met the commitment and during a visit to Washington last month Prime Minister Theresa May discussed the issue with U.S. President Donald Trump, who has repeatedly criticised members who do not spend enough on their militaries.
Echoing the rationale behind Trump's criticism, May then warned EU leaders at a summit earlier this month that they must raise their defence spending.
"In 2016, only two European NATO states, Greece and Estonia, met the aim to spend 2 percent of their GDP on defence, down from four European states that met this measure in 2015," said John Chipman, Director General of global security think tank IISS, at the launch of a report on global military capabilities.
"The UK dipped slightly below this at 1.98 percent, as its economy grew faster in 2016 than its defence spending. Nonetheless, the UK remained the only European state in the world's top five defence spenders in 2016."
The British government said the IISS presented its spending figures in U.S. dollars, and so had been impacted by fluctuations in exchange rates.
"These figures are wrong: NATO's own figures clearly show that the UK spends over 2 percent of its GDP on defence," a spokesman for the Ministry of Defence said in a statement.
"Our defence budget is the biggest in Europe, the second largest in NATO, and it is growing each year as we invest 178 billion pounds in new equipment and the UK steps up globally, with new ships, submarines and aircraft over the next decade."
(Reporting by Kylie MacLellan; editing by Stephen Addison)