£21.2 billion of planned spending on military equipment the next 10 years is denominated in either dollars or euros, the National Audit Office has warned, posing a "significant risk to affordability."
The analysis shows £18.6 billion of the Ministry of Defence's 10-year Defence Equipment Plan is denominated in US dollars and £2.6 billion in euros.
It warns that as of 10 January 2017, the pound was 21.4% below the exchange rate with the US dollar and 4.2% below the exchange rate for the euro used in the MOD's spending forecasts for the plan.
Liberal Democrat Leader Tim Farron commented: "Theresa May is betting $21 billion of taxpayers' money for vital defence equipment on a hard Brexit.
"The Prime Minister must now come clean: will her government spend more to fund our world-class armed forces or buy less equipment?
"It's clear a destructive, hard Brexit threatens not only people's economic livelihoods, but Britain's status as a leading power in the world.
"The Liberal Democrats will keep fighting to keep the UK in the Single Market and hold this Conservative Brexit government to account."
Ross Pepper, candidate in the recent Sleaford & North Hykeham, added "Lincolnshire has a proud Rpyal Air Force heritage. A blow for our defence spending will have a significant impact in an area like Lincolnshire and those serving our nation."