It's all in the same bag as: Now under £200! (price tag = £199.95)
Why are so many products priced at £9.99 / £12.99 etc.? Because the retailers have learnt that it sells more boxes of stuff.
People want to pay less, because that is a well developed facet of human nature. They will be attracted to prices that look like a bargain. If they find that it is less of a bargain - they might then feel 'closer' to the product and so decide to buy it anyway.
Howsoever it works - it plainly works. End of story.