UK, Japan Agree £18bn Investment Deal

The United Kingdom and Japan have agreed a multi-billion pound investment deal, which Prime Minister Sir Keir Starmer said will build a “new era of co-operation” between the two nations.

Japanese firms will spend more than £9bn on UK infrastructure and financial services and up to £9bn on UK offshore wind, creating tens of thousands of jobs, Downing Street said as Starmer met his Japanese counterpart Sanae Takaichi in London.

The deal comes as the UK’s economy struggles to grow, with experts predicting the U.S.-Israel war with Iran will hit Britain particularly hard.

It is not clear how much of the investment listed by Downing Street represents new money or previously announced plans.

Starmer and Takaichi met Japanese business leaders at Downing Street on Sunday, with the prime minister describing the talks as “very productive.”

He also said he was “really pleased” the two countries had reaffirmed their commitment to the GCAP fighter jet development programme being developed alongside Italy.

It was separately announced that Rolls-Royce would work with Japan’s Atomic Energy Agency to develop next generation nuclear technologies, while a new technology agreement would link UK research and development and software expertise with Japanese manufacturing.

Speaking through a translator, Takaichi said the UK is “an extremely important partner.”

Mitsubishi Estate, Mitsui Fudosan and Nomura Real Estate were among the Japanese firms which Downing Street said had agreed to spend billions over the next five years on infrastructure and real estate projects.

The Conservative Party’s shadow business and trade secretary, Andrew Griffith, said his party welcomed “any deal that brings investment” to the UK, but added that Labour’s “tax hikes and employer red tape are doing huge damage, destroying jobs and putting more and more people onto welfare.”

Though Downing Street has said the deal will boost jobs and long-term growth, experts expect economic pain in the near term.

The UK economy grew by 0.6 per cent during the first three months of the year, but analysts think growth will be sluggish in the months ahead.

The International Monetary Fund said last month that the U.S.-Israel war with Iran will hit the UK harder than any other advanced economy.

Meanwhile, the Bank of England has warned that UK inflation could rise as a result of the war, possibly reaching 6 per cent in the worst-case scenario.