Mercedes Benz has blamed inflationary pressures for its decision to increase new car prices in the UK.

MB-UK announced today that prices will increase prices across the range by 1.73% from April 2.

A Mercedes spokesman said: “We reduced prices in September by between 9% and 20%. At that time the pound was worth 3.43DM. Now it's dropped to 3.1DM and the price rises reflect that. We are passing on the increase in manufacturing costs – we have no option but to do that.”

And he stressed that this was the first price rise due to “inflationary pressures”in six years.

But one industry insider told AM-online: “Increasing prices at this sensitive time won't go down well in the market. It will look like commercial ineptitude.”