Britain and Germany signed a landmark defence agreement on Wednesday and pledged to co-operate on exercises on NATO's eastern flank as they stressed the need for Europe to be able to defend itself given possible escalation in the war in Ukraine.

LONDON (Reuters) - Britain and Germany will sign a defence agreement on Wednesday, the first of its kind between Europe's two biggest spenders on defence, which includes a commitment to develop new deep-strike weapons.

The site for the new factory has not yet been announced, but the Ministry of Defence (MOD) says it will support more than 400 jobs and will use British steel produced by Sheffield