Having the .co.uk domain will make all the difference.. but really if you have a UK site you should dig deep and get a decent UK host.. I am amazed at the folk who make money doing this but are always looking for the cheapest hosting.
It's like the.. I not made any sales via such and such during the night.... first thing I think is that so and so is with cheapo hosts and they where probably down all night, but they don't think of that, they think it's the merchant/network
So my advice is invest in your hosting, it's so important not to cut corners, and you can still get many a good deal here in the UK.