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.

Britain and Germany have signed what the UK government is calling a "landmark defence agreement" aimed at boosting security, investment and jobs. Under the agreement, German defence company Rheinmetall will open a new factory in the UK to manufacture barrels for artillery guns – supporting 400 jobs.