Japanese car-maker Nissan today threatened to hold back from new investment in the UK because of the strong pound.
President of Nissan Europe, Norio Matsumura hinted that the UK economy was making international firms think twice before pumping money into British business.
In an interview with the Economist Intelligence Unit's Motor Business Europe, he said: ''If the current strength of sterling continued then clearly we would have to think about investment elsewhere in the future.
''If sterling weakened by 10% to 20% then we might again reconsider investment in the UK.
''We are hoping that if the UK announces its intention to join Emu this will weaken sterling.''
The company is looking for suppliers for the production of its new Sunderland-built Almera car, which Matsumura said would be safe in terms of investment.
Matsumura added: ''It is already too late (to withdraw). We are in the process of selecting suppliers for Almera production and clearly the current exchange rate is influencing the process.''
He said Nissan planned to deal in euros from January 1, 1999, and added it was encouraging as many of its suppliers as it could to follow suit.
It was still considering whether to move into euros for the UK.
The UK is still the top European market for Nissan, selling 101,393 units which is 4.2% share of market.
Nissan is looking to improve its market share in Europe from its current level of 2.8% to 4% by the millennium.
Matsumura said UK output increased from 232,000 vehicles in 1996 to 272,000 last year and this year's target was 300,000.
But he said there had been a shortfall of 1500 cars in April because of a supply problem.
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