Afghanistan operations in the future could be affected.
By a quirk of geography, the English market town of Wootton Bassett has come to symbolize the pride that the British public continue to has in its armed forces.
Without fail, large crowds of ordinary townsfolk line its streets on at least a weekly basis every time a cortege carrying the remains of the latest soldier to fall in Afghanistan passes through from a nearby airbase.
But at a time of overwhelming public support for its service men and women, the global recession is causing Britain to face hard choices about its future military role in the world – putting at risk plans to build new aircraft carriers and heralding consequences for everything from operations alongside the US in Afghanistan to whether the UK remains nuclear-armed.
The start of the first full-scale official review of Britain's defense forces in more than 10 years was announced on Tuesday. It came within days of three of Britain's most influential independent research institutes forecasting that the £34 billion (about $54 billion) defense budget will be seriously cut.
The question of whether to support a £76 billion ($124 billion) program to replace Britain's aging Trident nuclear weapons system also looms large.
The Institute for Public Policy Research (IPPR), warned that the UK cannot afford much of the defense equipment it plans to buy, questioned the value of renewing the submarine-launched Trident nuclear deterrent, and said it was "delusional" to think the UK could act alone without closer European defense cooperation.