Stamp prices are set to rise

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The stamp price rises follow increases last April, when first class stamps rose by 2p to the current 36p and second class by 3p to the present 27p.

Business customers will see average price increases of 4.2%, although there will be smaller rises for firms using franking machines and pre-paid accounts.

The Royal Mail said the increases will add less than 5p to the average UK household's weekly expenditure.

The Royal Mail said that even after the increases, UK stamp prices would remain among the lowest in Europe, while quality of service was among the best.

Stamped mail will still be loss making after the new prices come into effect, the company added.

Luisa Fulci, Royal Mail's director of marketing services, said: "Stamped mail remains very affordable and consumers are still receiving excellent value for money - most countries in Europe charge more to deliver less.

"Our over-riding priority must be to safeguard the currently loss-making six-days-a-week one-price-goes-anywhere universal service, a task which the current market makes much harder, as big business customers choose other forms of electronic communications or competing operators instead of continuing to subsidise consumers."

The Royal Mail said the change in the way people communicated was accelerating the structural decline in market volumes, with the recent Hooper report into the postal market predicting that volumes could fall by between 5% and 7% a year.

Around five million fewer letters are being delivered every day compared with two years ago.