Lego prices in the UK are set to go up by an average of 5%.

The toymaker confirmed the change - starting on New Year's Day - was a reaction to the collapse in the value of the pound since the UK's vote to leave the EU.

It said that while it was raising the prices it charged retailers to stock its products, it was up to stores to decide if they passed on the increase.

The company, which recently confirmed the appointment of a British chief executive, is the latest to warn of rising costs - a scenario which economists expect to squeeze household budgets with inflation tipped to creep towards 3% over the next 12 months.

Weaker sterling makes imported products - such as food ingredients - more expensive. It is one factor behind rising fuel prices as oil is priced in dollars.


The issue came to prominence in October during the so-called Marmite-gate spat between supplier Unilever and supermarkets, which have warned of price pressures in 2017 despite fierce competition in the sector.

Just weeks later Apple confirmed it was raising UK prices for its computers by 20%.

Since then a string of retailers, such as luxury hamper firm Fortnum & Mason, have warned that price rises are inevitable.

The pound has fallen by up to 20% against the dollar alone since the Brexit vote but is currently trading at $1.27 - 14% down on its pre-referendum level.

Against the euro, sterling remains 8.8% weaker.