Starmer and Takaichi seal £18bn Japan-UK investment and defence pact

A broad investment pledge

Japanese firms are set to pour more than £9bn into UK infrastructure and financial services, with up to another £9bn earmarked for offshore wind projects, according to Downing Street. The package, unveiled during a London meeting between Prime Ministers Keir Starmer and Sanae Takaichi, is projected to create tens of thousands of jobs. A Downing Street spokesperson did not clarify how much of the sum represents fresh capital versus previously announced commitments. Speaking through a translator, Takaichi called the UK an extremely important partner.

“Very productive.”

Defence and the Gcap programme

Both leaders reaffirmed their commitment to the trilateral Global Combat Air Programme (Gcap) with Italy, despite what one report called “uncertainty” about the next‑generation fighter jet. Takaichi hailed deepening defence cooperation, describing the UK as a “quasi‑ally” amid unpredictable U.S. diplomacy under President Donald Trump and mounting threats from China and Russia. They also agreed to collaborate on safe navigation in the Strait of Hormuz.

“Britain has reached the level of a 'quasi‑ally'.”

Energy security and nuclear technology

Rolls‑Royce will partner with Japan's Atomic Energy Agency on next‑generation nuclear technologies, including mini reactors for factories, data centres and military bases. A separate memorandum of understanding links Rapidus Corp., a Japanese chipmaker aiming for mass‑produced cutting‑edge semiconductors, with a British R&D body. The deals form part of a wider push to secure supply chains for critical minerals, seen as a hedge against Chinese export restrictions on rare earths.

“I'm really pleased we have reaffirmed our commitment to the Gcap fighter jet programme.”

Geopolitical headwinds

The talks unfolded as the UK economy braces for fallout from the US‑Israel war with Iran. The IMF has said Britain will suffer the most among advanced economies, while the Bank of England forecasts inflation could climb to 6% in a worst‑case scenario. Takaichi sought Starmer's backing for an updated free and open Indo‑Pacific vision, and the two sides confirmed that Euro‑Atlantic and Indo‑Pacific security are inseparable. Both called for an early ceasefire and agreed on continued support for Ukraine.

“Labour's tax hikes and employer red tape are doing huge damage, destroying jobs and putting more and more people onto welfare.”

Political reaction

The opposition Conservative Party welcomed the investment but attacked Labour's domestic record. Shadow business secretary Andrew Griffith said the government's approach was undermining job creation at home.