Construction and agricultural equipment company JCB is to axe nearly 700 jobs blaming lack of credit from banks and not enough machinery sales.

Several sites will be hit by the cuts, including plants in Staffordshire, Derbyshire and Wrexham in North Wales.

JCB expects production in the UK in the first three months of 2009 to be around 75% lower than at the same time last year.

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JCB Chief Executive Matthew Taylor said: "The ongoing reluctance of the banks to provide credit is aggravating an economic downturn which is now becoming much steeper than we could have ever envisaged.

"This unprecedented situation needs to be addressed with some urgency so that confidence and stability can return, otherwise irreparable damage will be caused to the UK's manufacturing industry."

(CD/BMcC)