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UPDATE 1-Jaguar Land Rover to cut output and jobs due to Brexit, diesel slump -source

(Adds source, details, background)

LONDON, April 13 (Reuters) - Britain's biggest carmaker Jaguar Land Rover will cut around 1,000 jobs and production at two of its English factories due to uncertainty around Brexit and confusion over diesel policy leading to a fall in sales, a source told Reuters.

Output will be cut at its central English Solihull and Castle Bromwich plants, affecting some 1,000 agency workers, the source said.

JLR did not offer an immediate comment when contacted by Reuters.

The firm is due to make a formal announcement on Monday, although that could now change, according to the source.

"It's been obvious to everyone that sales have been dropping," the source said.

In January, the firm said it would temporarily reduce production at its other British plant of Halewood later this year in response to weakening demand due to Brexit and tax hikes on diesel cars but did not detail any job losses.

Jaguar sales are down 26 percent so far this year whilst Land Rover demand dropped 20 percent in its home market as buyers shun diesel, concerned over planned tax rises and possible bans and restrictions in several countries. (Reporting by Costas Pitas; editing by Stephen Addison)