Japanese firms have pledged to spend £18bn on UK infrastructure, financial services and offshore wind, Downing Street announced on Sunday, as Sir Keir Starmer met his Japanese counterpart Sanae Takaichi in London. The deal comes as the UK economy struggles to grow, with the International Monetary Fund last month warning that the US-Israel war with Iran would hit the UK hardest among advanced economies.
Speaking after the meeting, Starmer described the talks as “very productive” and said the investment would build “a new era of co-operation” between the two nations. Japanese companies will put more than £9bn into infrastructure and financial services and up to £9bn into offshore wind, creating tens of thousands of jobs, according to Downing Street.
“Japanese firms pledge £18bn for UK infrastructure, financial services and offshore wind, Downing Street announces.”
Among the firms named were Mitsubishi Estate, Mitsui Fudosan and Nomura Real Estate, which Downing Street said had agreed to spend billions over the next five years on infrastructure and real estate projects. It is not clear how much of the investment represents new money or previously announced plans.
Separately, Starmer said he was “really pleased” the two countries had reaffirmed their commitment to the Gcap fighter jet programme, developed alongside Italy. Rolls-Royce will work with Japan’s Atomic Energy Agency to develop next generation nuclear technologies, while a technology agreement will link UK research and development and software expertise with Japanese manufacturing.
Speaking through a translator, Takaichi said the UK is “an extremely important partner”.
The Conservative shadow business and trade secretary Andrew Griffith 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”.
The UK economy grew by 0.6% during the first three months of the year – the fastest growth of any G7 economy – but analysts think growth will be sluggish in the months ahead. The IMF expects the UK to recover and again become the fastest growing European economy next year, albeit at a slightly slower rate of 1.3%.
Though Downing Street has said the deal will boost jobs and long-term growth, experts expect economic pain in the near term.