Tech prices in the UK face a US squeeze from two directions
A weaker pound would hit UK tech prices harder than most goods, says Charles Lagares (Chief Operating Officer at EBC Financial Group).
Speaking to HotMinute, Lagares noted that most phones, laptops, video game consoles, and TVs are set in US dollars. When the pound slips against the dollar, retailers need more pounds to buy the same stock, and some of that extra cost often reaches the price tag.
He noted that after the pound fell in 2016, the ONS found higher price rises for heavily imported goods such as new cars and footwear than for services such as hairdressing. It also found bigger rises for durable goods, which last for years, than for goods used up quickly.
“Phones, laptops and consoles are imported durable goods, so they are likely to sit near the top of that list. Shoppers then adjust: Gartner, the technology research firm, expects buyers to respond to higher tech prices this year by holding on to their devices for longer or choosing refurbished ones,” he said.
AI boom pushing prices up
Another reason UK tech prices have been on the increase recently is because of the AI boom – primarily driven by US companies such as Nvidia, OpenAI, Microsoft, and Google.
Raspberry Pi, a British maker of low-cost computers, said in February that its earlier price rises came from higher memory chip costs, caused by competition for factory capacity from the roll-out of AI infrastructure.
Gartner estimated in February that the combined price of two parts, the memory chips that act as a device’s working memory and the solid-state drives that store its data, could rise 130% by the end of 2026. It is expected to lift personal computer prices by 17% and smartphone prices by 13% compared with 2025, and to reduce the number of devices sold.
“These parts are generally bought in dollars, so a fall in the pound would raise their cost in pounds as well. We need to invest and rethink our strategy – we do not want creative people to leave the UK,” said Lagares.
