Depends on where it is and what standard of accommodation it is for that price.
The flight we have on Friday varied a lot from day to day when I was looking. At one point it was so high that I started looking elsewhere. But eventually we got it a good price. Loads of reasons why prices can change- supply and demand being the obvious. but also things like airline fuel prices, exchange rates; the cheaper fares that most flights have may have sold out, air passenger duty going up, hotels putting up prices as rooms begin to sell out etc.
Our first ever "long haul " for us- we bought last minute and we ended up chatting to some folks on the airport transfer coach who paid almost twice what we did( we didn't tell them that though!)

I asked this question a while back and now coming back to it, the cost holiday we’ve booked has since gradually risen so that in now is in excess of £1000 (per person) We paid £407 booked in early June. Are we really getting a bargain at that price?

To confirm again 1 week end of September SC to the Algarve .

I still fail to see any logic in this pricing structure

As Fiona has said the "logic" is the wonderful capitalist world of supply and demand -the T.Os see an opportunity to maximise profits on a popular destination - it (occasionally)does work the other way; some long haul destinations can really plummet in price the week of departure when the likes of Thomson and Thos Cook are struggling to fill their planes!!

There are different factors that affect the online bookings. Some are allocated to sell some rooms in-case of accommodation. Some might capitalize to make good use of the online bookers. Sometimes if you contact a Travel Agent you get a better deal. For flights; seats are cheaper when travel dates are far, nearing the travel date, demand is high thus change in price or cheaper seats have been sold out.