2 days ago
Mitchell LabiakBusiness reporter
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The UK and Japan have agreed a multi-billion pound investment deal which UK 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 the PM met his Japanese counterpart Sanae Takaichi in London.
The deal comes as the UK’s economy struggles to grow, with experts predicting the US-Israel war with Iran will hit the UK particularly hard.
It is not clear how much of the investment listed by Downing Street 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”.
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.
Meanwhile, it was announced Rolls-Royce would work with Japan’s Atomic Energy Agency to develop next generation nuclear technologies and a technology agreement would link up UK research and development and software expertise with Japanese manufacturing.
Speaking through a translator, Japan’s prime minister said the UK is “an extremely important partner”.
Mitsubishi Estate, Mitsui Fudosan, Nomura Real Estate were some of 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’s shadow business and trade secretary Andrew Griffith said his party welcomed “any deal that brings investment” to the UK.
However, he added that Labours “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.
But the IMF expect the UK to recover, to again become the fastest growing European economy next year in the smaller G7 group of advanced economies, albeit at a slightly slower rate of growth of 1.3%.
