PEUGEOT is the latest manufacturer to slash car prices in the UK and has boosted specification across its range. Effective from Friday, the value of the reductions added to the specification enhancements means an average saving of £650 on a 206 up to £1,525 on a 406.

Peugeot managing director Tod Evans said: 'Peugeot has been promoting savings against list price on certain models since early summer providing us with unprecedented sales success with over 9% of the UK market during this period. Our latest move to provide price reductions across our new car range adds clarity to the Peugeot offer for our customers.'

The cut by Britain's third biggest manufacturer follows list price reductions by other leading volume manufacturers and increases pressure on Nissan, Citroen and Fiat to make list price cuts.

New prices (previous prices in brackets): 106 Independence £6,495(£6,995); 206 1.4 LX 3dr £8,995 (£9,625); 306 1.4 Meridian £10,995 (£11,995); 406 2.0 HDi 90 LX £15,495 (£16,295); 607 S 2.2 £21,195 (£22,295)