Booking.com hotel increases rate after booking

[matt21]

I managed to book a hotel in Budapest early for the Hungarian Grand Prix at 141.75 EUR per night back in October time through Booking.com where I pay when I arrive and have free cancellation. Booking.com just contacted me saying that there was error with the rate and they will meet in the middle at a much higher rate. Three months on nowhere else is available at a decent price so doesn't leave me a lot of option.

Clearly I booked before they increased their prices for the F1. Can they do this?