The original MCV article also says this...
"However, a closer inspection of the documentation sent to retailers seems to suggest that the Xbox 360 Arcade listing is a placeholder for an as-of-yet unspecified SKU"
May be a little more to this than a price hike. A price hike to the Arcade model and a dumping of the 5 games seems wholly unrealistic to me.
Anyway it means that entry price of 360 will get higher in the UK, Shifty may be on to something, rising the price to be able to announce a cut right before christmas may work in the mysterious world of PR.