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Brexflation: Lenovo, HPE and Walkers crisps all set for double-digit hike

Tech vendors line up the Christmas cheer on 1 December. Lineker's lot get in earlier

A second wave of double-digit price hikes are coming to a reseller or retailer near you from the start of next month, both Hewlett Packard Enterprise and Lenovo have confirmed.

Since the referendum, the UK's currency has fallen from $1.49 to £1 to $1.21, a drop of 18.7 per cent and many IT makers have reacted, from the cloud giants including AWS through to hardware players.

American titan HPE already raised its list price by between 6 to 10 per cent on 1 August, and Lenovo pushed up its prices by 10 per cent on the same date – both blamed depreciation of the pound.

Now all of Lenovo's kit is going to jump by another 10 per cent from 1 December for UK customers and HPE will raise its gear by 6 to 12 per cent.

A Lenovo spokesman told The Register: "Like any global company we always take currency exchange rates into consideration in our pricing strategy.

"This is business as usual and part of the market conditions in which any international company operates. Any changes form part of our ongoing communication with our channel partners."

Similarly at HPE, a corporate voice box sent us a prepared statement: "HPE, like any other international company, adjusts prices based on exchanges rates and currency fluctuations. After careful consideration of the business impact of a strong dollar against the pound sterling, we may decide to make adjustments to our pricing."

Some vendors including Cisco and AWS already charge UK customers in US dollars, so their prices tracks foreign exchange movements.

Others have directly increased the local cost of boxes. Dell was the first to do so in early July, HP Inc was weeks behind. Asus put up its prices from October, Apple followed close behind, and Fujitsu upped the cost of its storage line by 5 per cent from the start of November.

We asked Fujitsu for comment and are awaiting a statement on why it chose to act in one area of the business.

Microsoft is raising the cost of its cloud services by 22 per cent from the start of 2017 and its on-premise software is rising by 13 per cent. It refused to explain the difference between the hike, but this is presumably because it has to pay out more locally to power its data centres.

The UK pound was already in a weakened state against the dollar prior to Brexit, and it had already led to price rises in 2015, though financial analysts had expected the currency to recover this year and into next.

Jeremy Davies, CEO at channel analyst Context, said Brexit caught many by surprise. "The thinking had been that there would be a bounce in GBP value after the vote," he told us. "When the vote did indeed go the 'wrong way', GBP collapsed and action then needed to be taken."

If price rises in tech aren't devastating enough, this week it emerged that Walkers crisps owner PepsiCo is raising the price of its snacks by 10 per cent too, even though the spuds are grown locally.

Are you watching, Mr Farage? Got nothing to say about this Brexploitation? ®

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