Swiss food group Nestl� has denied suggestions that jobs are at risk at one of its UK factories because of the strength of sterling.

The chocolate manufacturer acknowledged that it had transferred some of its Kit Kat production from York to Hamburg in recent months.

But it said the success of the new Kit Kat Chunky had brought extra production to York, offsetting any lost business.

In a statement, Nestl� did say: "If the strength of the pound is maintained then there is a risk that our export business would suffer further and that this would lead to job losses."

But it insisted: "The success of Kit Kat Chunky, which has brought substantial additional volume to the York factory, has offset any lost export volumes and there have been no overall job losses."

Controversy

The Nestl� announcement follows a week of controversy over Britain's possible adoption of the euro, with some foreign multinationals claiming they will reduce future investment in the UK if there is no clear signal on euro membership.

For example, car-maker Nissan threated last week to shift production from its Sunderland plant to the continent because of the strength of sterling.

And in a leaked document, the UK's ambassador to Japan said foreign investment would be lost unless steps were taken towards adopting the euro.

And to add to the UK government's dilemma, European Central Bank president Wim Duisenberg said on Friday that the UK was suffering from not being in the eurozone.