Microsoft has finalised the boundaries for licencing price increases in the UK, which will see the upper boundary drop from 33.5 percent to 25.9 percent.

Last month Microsoft revealed that because of sustained differences between the British pound and the euro it would be increasing its licencing prices to maintain consistency across the region.

These initial increases were estimated to be between 7.5 percent and 33.5 percent. However, Microsoft now believes that lowering this range to between 1.7 percent and 25.9 percent will provide an accurate adjustment that maintains consistency across the European region.

IT buyers have until 1 July to purchase licences under the old Microsoft prices.

However, at the time of the initial announcement Microsoft confirmed to Computerworld UK that it could not rule out future price increases, as it will continue to monitor currency movements and may make further adjustments if there are large fluctuations.

It was also revealed yesterday that the Cabinet Office has reached a three-year licencing deal with Microsoft for its upcoming Public Sector Agreement 2012 (PSA12). The government's current PSA09 deal with Microsoft, which sets discounting licencing prices for the public sector, is due to come to an end on 30 June 2012.

The price changes for the public sector will be much smaller, where it will see a one percent increase on PSA09 pricing and an inflation uplift based on the Office of National Statistics Consumer Price Index occurring every year on 1 April up until 2015.