Eurostar has slumped to an annual loss, blaming terror attacks in Europe and tough trading conditions.

The cross-Channel rail service, which stops at Ebbsfleet and Ashford International, said passenger numbers were down 4% to 10 million in 2016.

It reported an underlying operating loss of £25 million.

Sales declined 3% to £794 million, although this would have been worse but for the fall in the value of the pound after the Brexit vote.

Sales were down 8% at constant exchange rates.

Despite this, the firm had a surge in late bookings towards the end of 2016, reporting its busiest December ever.

Sales revenues for the first 10 weeks of the year are up by 12% and it said the markets outside Europe are performing well.

Chief executive Nicolas Petrovic said: “Despite the difficult trading environment last year, we continued to make major investments in new trains, our stations and our overall service.

“With the return of travellers from the US and business travel on the increase, the market is now rebounding strongly and we are optimistic about the growth prospects for the year.”

Since the start of this year the number of US travellers increased by 17% compared with the same period last year.

Passengers from outside Europe have grown 18% in the first 10 weeks of 2017.