UK Prime Minister Sir Keir Starmer and Japanese Prime Minister Sanae Takaichi have agreed on a multi-billion pound investment deal in London, which Starmer claimed would usher in a 'new era of cooperation' between the two nations.
According to Downing Street, Japanese firms are set to invest over £9 billion in UK infrastructure and financial services, and up to £9 billion in UK offshore wind, potentially creating tens of thousands of jobs.
The deal comes as the UK economy struggles to grow, with experts predicting that the US-Israel war with Iran will hit the UK particularly hard. The International Monetary Fund reportedly stated last month that the conflict would impact the UK more than any other advanced economy.
It remains unclear how much of the investment represents new money versus previously announced plans. Critics have questioned the transparency of the figures.
Starmer and Takaichi met Japanese business leaders at Downing Street on Sunday, with Starmer describing the talks as 'very productive'. The two leaders also reaffirmed their commitment to the Gcap fighter jet program alongside Italy.
Rolls-Royce will collaborate with Japan's Atomic Energy Agency on next-generation nuclear technologies, and a technology agreement will link UK R&D and software expertise with Japanese manufacturing.
Takaichi, speaking through a translator, called the UK 'an extremely important partner'. Japanese firms including Mitsubishi Estate, Mitsui Fudosan, and Nomura Real Estate have allegedly agreed to spend billions on infrastructure and real estate over the next five years.
Shadow business secretary Andrew Griffith welcomed any investment but warned that Labour's 'tax hikes and employer red tape are doing huge damage, destroying jobs and putting more people onto welfare'.
Despite Downing Street's claims of boosting jobs and long-term growth, experts anticipate near-term economic pain. The UK economy grew by 0.6% in the first quarter, but analysts expect sluggish growth ahead.
The Bank of England has warned that UK inflation could rise to 6% in a worst-case scenario due to the war, adding to the economic uncertainty surrounding the deal.
Source: www.bbc.com