Royal Mail to raise stamp prices

The last price increase was two years ago, when first-class stamps jumped to 60p from 46p

The price of a first-class stamp is to increase by 2p to 62p while a second-class stamp will go up 3p to 53p, Royal Mail has announced.

Also from 31 March, a large letter first-class stamp up to 100g will rise by 3p to 93p and a large letter second-class stamp will increase by 4p to 73p.

Despite the increases, Royal Mail insisted its prices were "amongst the best value for money in Europe".

Two years ago the cost of a first-class stamp jumped from 46p to 60p.

Royal Mail said that under the current regulatory framework, it could have increased second-class stamps by 7p, instead of the 3p it chose to.

It said its "high quality, six-day-a-week, one-price-goes-anywhere universal service" costs more than £7bn a year to run.

The average across Germany, France, Spain and Italy for first-class letters is 67p and 60p for second class, Royal Mail said.

The Royal Mail's Stephen Agar said: "We understand that nobody likes to pay more, especially in the current economic climate.

"Our prices remain amongst the best value for money in Europe, and we have the highest service specification of any major European country."

The Federation of Small Businesses' John Allan called the increase "another unwelcome cost in doing business".

"Businesses will have to make a choice whether to absorb this new cost or pass it on to their customers," he said.

"With these extra costs, they will certainly be looking to Royal Mail achieving their delivery and service performance targets, and for Ofcom to use their powers to fine should they not be met."

Sharon Little, chief executive of the Greeting Card Association, said she was thankful the price increases were "minimal" and could not be compared with the increases of two years ago, which were the biggest annual increases in percentage terms since 1975.

She said she did not think the latest rise would impact on the association's nearly 500 members, which include Hallmark and UK Greetings.

More greeting cards are sent in the UK than any other nation, she said, with the price increases averaging 64p extra per person per year.

Royal Mail was privatised in October, but despite the money it brought into the Treasury, critics have accused the government of selling shares too cheaply.