Brexit is making Lego more expensive

Manufacturers are feeling the pressure as pound values fail to recover ...

Brexit is making Lego more expensive

Steve Parsons PA Archive / PA Images

Lego has announced that its prices will increase in the UK in 2017 as plunging pound values squeeze the toy company's margins.

A letter signed by Lego UK and Ireland’s general manager and vice-president, Fiona Wright said that prices for play-sets, bricks, and mini-figures will go up from January 1st in Britain as a "direct result of the continued devaluing of the UK pound."

The note, which was posted on Twitter, adds that in the "event of further negative trend" there could be further price increases.

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Lego has confirmed to Newstalk that the price hike "applies to [the] UK only."

The Danish firm added that it is carrying out research regarding the price elasticity of Lego demand, to ensure that it minimises the "impact" that price hikes will have on sales.

Lego's price increase will impact retailers who will then need to decide if they pass on the increase to consumers, or to find other ways to absorb the costs.

Since the EU membership referendum vote sterling values have dropped by almost 10% against the euro.

This is part of a broader trend - Apple recently announced that it will increase the cost of some of its products by 20% in the UK.