The President of the Society of Motor Manufacturers and Traders (SMMT), Mike Baunton, warned of a growing cash drain facing the British motor industry if nothing is done to counter the current strength of the pound.

Speaking at a special President's Lunch, to celebrate the 100th anniversary of the Society, Baunton said: "We are grateful to the government for giving us consistently low inflation and low interest rates, but something has to be done about the high value of the pound. It is forcing manufacturers who build cars in the UK to increasingly source components from overseas, and that means billions of pounds are being lost to our economy.

"We are trying to counter this problem, through initiatives such as the Automotive Innovation and Growth Team (AIGT), but we need to get on with it."

As well as this warning, Baunton also had praise for the motor industry, which he hailed as Britain's most important manufacturing sector, delivering £46 billion to UK plc.

He added: "We need to ensure that the motor industry remains in pole position to sustain both the economic lifeblood of the nation and maintain the freedom to live our lives in the way we have come to accept as normal."