Britain's biggest carmaker Jaguar Land Rover (JLR) will hire 5,000 staff as it boosts its skills in autonomous and electric technology, a welcome business endorsement as Prime Minister Theresa May starts Brexit talks after a botched election.

JLR, which employs more than 40,000 people globally, said it would hire 1,000 electronic and software engineers as well as 4,000 additional personnel including in manufacturing, most of whom will be based in Britain. The recruitment process will take place over the next 12 months, during Britain's talks to leave the European Union (EU), which carmakers have warned must result in a deal which retains free and unfettered trade to protect jobs.

May lost her parliamentary majority in the June 8 general election that her Conservatives fought on the promise of a clean break with the EU single market and customs union. The renewed political uncertainty has seen business confidence tumble in recent days, according to surveys and business groups.

Hours before the talks were due to begin in Brussels, the heads of the UK's biggest business lobbies called on the government to engage “continuously” with UK business interests and strike a deal that preserves the benefits of EU membership including tariff-free trade, guarantees for EU citizens living in the UK and minimal customs formalities.

Finance minister Philip Hammond said leaving the EU without an agreement would be a “very, very bad outcome for Britain” and he wanted an exit that would support employment and investment. “When I talk about a Brexit that supports British jobs, British investment and British business I mean a Brexit that avoids those cliff edges,” Hammond said in an interview with BBC television on Sunday.

JLR, which is owned by India's Tata Motors, will build its first electric vehicle, the I-PACE, in Austria but has said it wants to build such models in Britain if conditions such as support from government and academia are met.

Automakers are racing to produce greener cars and improve charge times in a bid to meet rising customer demand and fulfil air quality targets but Britain lacks sufficient manufacturing capacity, an area ministers have said they want to build up.

JLR, which builds just under a third of Britain's 1.7 million cars, has said half of all its new models will be available in an electric version by the end of the decade, requiring new skills among its staff.

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