Does the physical location of a server effect the local rankings of a site?

[ben_dpp]

I've just been running a report on a site and noticed that while they have a .co.uk domain it is hosted on a server in the United States and just wondered if anyone was aware, if the physical location of a server mattered to search engines for ranking purposes especially with local search?

[ThinkTankSEO]

Personally, I think where does matter and is counted as another positive indicator that the site is legit if the TLD and location of hosting match.  I only have limited examples to draw from but I recall there being a 2 position increase after moving from Justhost to a Canadian hosting solution for a .ca.

[Mobilio]

If your domain is ccTLD (.co.uk) then geolocation of server didn't matter. Of course just need to be fast for that country where users will be.

[GastonRiera]

Hi Ben!
Yes, it affects. 
That was said by Matt Cutts, check out the videos:
Can the geographic location of a web server affect SEO? - Youtube - Matt Cutts 
What impact does server location have on rankings? - Youtube -  Matt Cutts

Also, here you got other 2 Q&A that where responded with great info.
Effect of same country server hosting on SEO - Moz Q&A Does the Location of my Server effect my SEO? - Moz Q&A

In my experience (there aren't servers in Argentina) the affect is minimum. I believe that there are other factors that influence more than the location server's IP.

Hope I was helpfull.
GR