Japanese firms have pledged more than £18bn to UK infrastructure, financial services and offshore wind, Downing Street announced on Sunday as Prime Minister Sir Keir Starmer met his Japanese counterpart Sanae Takaichi in London.
The deal, which Sir Keir said would build a “new era of co-operation” between the two nations, comes as the UK economy struggles to grow. Experts predict the US-Israel war with Iran will hit the UK particularly hard, the International Monetary Fund said last month.
“Japan pledges £18bn for UK infrastructure and offshore wind, Starmer hails 'new era of co-operation'.”
Japanese companies will spend more than £9bn on infrastructure and financial services and up to £9bn on offshore wind, creating tens of thousands of jobs, according to Downing Street. It is not clear how much of the investment represents new money or previously announced plans.
Sir Keir and Takaichi met Japanese business leaders at Downing Street on Sunday, with Starmer describing the talks as “very productive”. Speaking through a translator, Japan’s prime minister said the UK is “an extremely important partner”.
Separately, Sir Keir said he was “really pleased” the two countries had reaffirmed their commitment to the Gcap fighter jet programme being developed alongside Italy. Rolls-Royce will work with Japan’s Atomic Energy Agency to develop next generation nuclear technologies, and a technology agreement will link UK research and development and software expertise with Japanese manufacturing.
Mitsubishi Estate, Mitsui Fudosan and Nomura Real Estate were among the Japanese firms Downing Street said had agreed to spend billions over the next five years on infrastructure and real estate projects.
The Conservative shadow business and trade secretary Andrew Griffith said his party welcomed “any deal that brings investment” to the UK. However, he 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% 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, to again become the fastest growing European economy next year in the smaller G7 group, albeit at a slightly slower rate of 1.3%.