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Apple’s UK App Store prices will rise 25 percent following Brexit currency fluctuations

Apple App Store
Scott Mlyn | CNBC

Prices in the UK's App Store are set to rise 25 percent as the pound continues to lose value after Brexit. According to a letter sent to Apple developers reported by 9to5Mac and confirmed by The Verge, the cost of the former cheapest apps will rise from £0.79 to £0.99, while the next tier of prices will be bumped from £1.49 to £1.99, and games like Super Mario Run which previously cost £7.99 will now set UK customers back £9.99.

This latest round of price changes doesn't just affect the UK (customers in India and Turkey are also going to see increases), but the extra cost is certainly a side effect of currency fluctuations following Brexit. The pound's value is currently on its way to a 31-year low against the dollar, briefly falling below $1.20 on Monday following newspaper reports of UK prime minister Theresa May ambitions for a "hard" Brexit. This means the UK's departure from the EU single market, with May's plans set to be announced in full today.

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Accounting for these changes (as well as the UK's 20 percent VAT rate) means that sterling prices in the App Store have now reached parity with the dollar. While critics might note that Apple's price increase is greater than the pound's loss in value, financial analysts predict that the market still hasn't fully priced in the cost of Brexit — that is to say the pound still has further to fall. (Plus Apple is bound to round up to prices ending in 99p.) The new prices will roll out in the App Store over the next seven days.

News of the App Store increases follows similar price hikes for Macs in the UK last October, including bumping the price of the then three-year-old Mac Pro by £500. And Apple is of course not the only US tech giant to be affected by these currency changes, with companies including Tesla and HTC introducing similar increases.

Update January 17th, 5:10AM ET: In a statement provided to The Verge, Apple explained the coming prices changes: "Price tiers on the App Store are set internationally on the basis of several factors, including currency exchange rates, business practices, taxes, and the cost of doing business. These factors vary from region to region and over time."