THE strong pound could start to hit York's ability to attract American investment, Paul Murphy, chief executive of York Inward Investment Board, warned today.

He said that over the past six months, overseas companies inquiring about investing in York had for the first time started commenting on the high value of the pound as a possible disincentive.

The pound's strength against the Euro was a particular concern for American investors who wanted to create a base in Britain primarily to export to Europe.

While he did not believe sterling had yet been a key factor in any specific York inward investment decision, he was concerned that this could happen in future if the pound remained so strong. It could override the benefits of basing in Britain, and York, such as the shared language and culture.

Mr Murphy's comments come in the wake of Nestl Rowntree's warning earlier this week that jobs could be lost at its York factory if the strong pound continues to hit exports to Europe.

Meanwhile, Nestl Rowntree has confirmed rumours that it has asked City of York Council to conduct a land search on its York factory site. But it has categorically denied that this is with a view to redeveloping some or all of the site in the wake of falling exports, and is just a routine inquiry.

A spokesman said inquiries had been received from Yorkshire Water about laying a pipeline across the site, and another query from the railways about installing a sign near the adjacent line. It had then been discovered that it was not known which land was owned by Nestl and which was owned by the Joseph Rowntree Trust. The inquiries were therefore being made to clear up the matter.