Google have launched a great new feature for their Webmaster tools. They now allow you to specify which country your site is targeting despite the server location and domain name. So if you're one of those people with a .com address who inadvertently ended up with a .com address but a server in a country other than where your target market is, this new tool will allow you to appear in the SERPs of your choice. e.g. if you want to target the UK with a .com address and made the mistake of choosing 1and1 as your host (Their servers are based in Germany) now you can tell Google to list you on UK search results instead of German ones.
I would still recommend using a UK server where possible as Google isn't the only search engine to use geo location, plus you are also likely to get slightly better performance from a local server than an overseas one.
One side effect of this move by Google might be that UK hosts will reduce their prices due to increased overseas competition. Only time will tell.
http://googlewebmastercentral.blogsp...oices-for.html