The analysis was conducted last autumn. Since then, inflation has only increased further, with the Treasury reportedly warned it could peak at nine per cent.

The fall could call into question a promise made in the 2019 Conservative manifesto to increase the defence budget above inflation “every year”.

The drop is being cited by those in Whitehall arguing for a defence spending increase in Mr Sunak’s Spring Statement next week, given the Russian invasion of Ukraine.

Currently, Number 10 and Number 11 are holding firm that there will be no increase in yearly defence spending – arguing that just two years ago, the UK announced the biggest increase since the Cold War.

But insiders arguing for a spending increase have dismissed the argument. “There’s an elephant in the room – Putin hadn’t invaded Europe then,” said one Whitehall source.

The invasion of Ukraine is in its third week and there are no signs that Vladimir Putin, the Russian president, is wavering – leaving ministers to warn of a long conflict ahead.

The war has triggered a wave of calls for an increase in UK defence spending, including from Cabinet ministers, moderate Tory MPs and the Labour leadership.

Prof Malcolm Chalmers, deputy director-general of Rusi, told The Telegraph: “Already overall defence spending in real terms in 2023/24 and 2024/25 is set to fall.

“Unless the Ministry of Defence gets compensation for higher inflation from the Treasury, then the real terms reduction in the defence budget in those years will be higher.”

He noted that increases in wages for soldiers and petrol costs are likely to especially eat into the defence budget, unless more money is signed off by the Treasury.

The developments add to the pressure on Mr Sunak to increase defence spending in his Spring Statement, often described as a “mini Budget”, which happens in eight days’ time.

The next general election is widely expected to take place in May 2024, meaning that the Conservatives risk going into the ballot with falling defence spending in real terms.