Deal Includes £9bn for Infrastructure and Financial Services

Japanese firms will spend more than £9bn on UK infrastructure and financial services, as well as up to £9bn on UK offshore wind, creating tens of thousands of jobs, according to Downing Street. The announcement came as Prime Minister Sir Keir Starmer met his Japanese counterpart Sanae Takaichi in London.

Uncertainty Over New vs. Previously Announced Investment

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

Rolls-Royce to Collaborate on Nuclear Technology

Meanwhile, it was announced that Rolls-Royce would work with Japan’s Atomic Energy Agency to develop next generation nuclear technologies; a technology agreement would also 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. And Nomura Real Estate were some of the Japanese firms that 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 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, but analysts think growth will be sluggish in the months ahead. Meanwhile, the Bank of England has warned that it expects UK inflation to increase as a result of the war, possibly reaching 6% in the worst-case scenario.

Sir Keir and Takaichi met Japanese business leaders at Downing Street on Sunday, with Starmer describing the talks as ‘very productive.’ The announcement marks a significant step in the UK-Japan economic partnership amid global economic challenges.