The UK and Japan have agreed a multi-billion pound investment deal, according to a BBC report. UK Prime Minister Sir Keir Starmer said the deal 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 Sir Keir met his Japanese counterpart Sanae Takaichi in London.
Deal Details
The agreement was announced after a meeting at 10 Downing Street in London on Sunday, where the two leaders also met Japanese business leaders. Sir Keir described the talks as "very productive". Speaking through a translator, Japan's Prime Minister said the UK is "an extremely important partner".
Downing Street did not specify how much of the listed investment represents new money versus previously announced plans, according to the BBC.
Company Commitments
Several major Japanese firms have agreed to invest billions over the next five years on infrastructure and real estate projects, Downing Street said. These include:
- Mitsubishi Estate
- Mitsui Fudosan
- Nomura Real Estate
Additionally, Rolls-Royce will work with Japan's Atomic Energy Agency to develop next generation nuclear technologies. A technology agreement will also link UK research and development and software expertise with Japanese manufacturing.
Economic Context
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, according to the BBC. Official data showed the UK economy grew by 0.6% during the first three months of the year, but analysts expect sluggish growth in the months ahead. The Bank of England has warned that UK inflation could increase as a result of the war, possibly reaching 6% in a worst-case scenario.
Official Reactions
The Conservative shadow business and trade secretary Andrew Griffith said his party welcomed "any deal that brings investment" to the UK. However, he criticised Labour's "tax hikes and employer red tape" as "doing huge damage, destroying jobs and putting more and more people onto welfare".
| Key Figures | Amount |
|---|---|
| Infrastructure and financial services investment | More than £9bn |
| Offshore wind investment | Up to £9bn |
| Total deal value | £18bn |
| UK GDP growth (Q1 2026) | 0.6% |
| Inflation worst-case scenario | 6% |
Trade Policy Implications
For importers, exporters, and trade policy professionals, this bilateral investment deal signals strengthened UK-Japan economic ties beyond the existing trade agreement. The focus on infrastructure, financial services, and offshore wind may create opportunities for UK firms in these sectors. However, the uncertain global economic outlook, including potential inflation spikes and war-related disruptions, could affect the timeline and realisation of these investments.
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