Microsoft hikes UK prices 22% as sterling slumps post Brexit

Microsoft will hike the prices it charged to UK businesses by up to 22 per cent to account for the slump in the value of the pound following the EU referendum  result, the software company announced.

The new prices, would become effective in January 2017, with amounts expected for locally hosted software set to increase by 13 per cent, while ''most'' cloud-hosted services would increase by the full 22 per cent, the company said in a statement. While programs like Microsoft's Office suite were once installed locally on PCs, in recent years the cloud-based subscription version, Office 365, had gained popularity.

''We periodically assess the impact of local pricing of our products and services to ensure there is reasonable alignment across the region and this change is an outcome of this assessment,'' Microsoft said. ''These changes are similar to the recent harmonisation adjustments to pricing in Norwegian krone and Swiss franc we made in April 2016.''

Business customers would see the price changes if they bought directly from Microsoft, but third-party resellers would likely up prices to match the headline increase.

The software that would see prices increase is Microsoft's Office suite of productivity tools that includes Word, Powerpoint and Outlook, and also its Office 365 cloud platform. The price increase would, however, only apply to new purchases, not ongoing contracts, which would delay the blow for many businesses and organisations which currently used Microsoft technology.

The UK' s  23 June shock EU exit vote triggered the biggest one-day fall in sterling against the dollar and the pound was now down 18 per cent against the US currency, to which  computer makers such as Apple, Dell responded by increasing prices in UK.

According to the Bank of England, inflation was expected to rise steadily over the next couple of years, exceeding the 2 per cent target and eroding household living standards.