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I've never had problems with .co.uk domains being on servers outside the UK,
the big problems tend to occur when it is a .com domain which is hosted
outside the UK.
On saying that, I did have a .co.uk site a few years back which seemed to bring
in a lot of Austarlian hits. On closer inspection I found it was on Australian
servers, which seemed to imply it was ranking better on google.com.au than
it would have done if not hosted there.
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