Royal Mail To Raise Stamp Costs From 30 March

Royal Mail (LSE: RMG.L - news) is to increase the costs of both first and second class stamps from 30 March.

The news was contained in an announcement about wider pricing of letters and parcels.

It said the prices for first and second class stamps would rise 1p to 63p and 54p respectively, insisting the cost remained among the best in terms of value offered across Europe.

Sending a large letter would increase by 2p to 95p for first class and by 1p to 74p for second class, Royal Mail said.

Royal Mail also announced that it was simplifying and cutting the price of sending a second-class medium parcel, and will maintain prices for second-class small parcels which was introduced as a Christmas promotion.

It meant parcels weighing up to 2kg would be priced at £4.89, which Royal Mail said represented a saving of up to £3.11.

The postal group said it had thought "carefully" about the impact on its customers before deciding to raise letter prices, adding that it recognised how the recent tough economic conditions had made it difficult for consumers and businesses.

Royal Mail has questioned the sustainability of the company's Universal Service Obligation (USO) under which it must deliver letters to each UK address.

It has accused rivals of "cherry-picking" - concentrating their operations in urban areas - to save on cost though the industry regulator has said it sees no reason to re-examine the USO.