First class stamp will cost 34p

The cost of a first-class stamp is to increase by 2p to 34p from next April, the Royal Mail has announced.

A second-class stamp will increase by 1p to 24p. It will be the first increase since last April's rise of 2p in the price of both stamps.

The cost of posting larger first-class letters will increase by 4p to 48p, while bigger second-class items will increase by 3p to 40p.

Lorna Clarkson, Royal Mail's director of commercial policy and pricing, said: "Now that the UK mail market is open to full competition, it is essential that Royal Mail's prices more closely reflect the true cost of collecting, sorting and delivering around 80 million items of mail a day to 27 million addresses across the UK.

"The price of a first-class stamp in the UK remains lower than almost any other European country, representing great value for customers sending stamped mail to arrive the next working day after posting."

The price of business mail will also rise, but at a lower rate, with discounts offered to business customers for some services.

The Royal Mail said business mail continued to heavily subsidise mail sent by other customers, such as personal letters and cards.

"Stamped mail made a loss of £237 million in the 2005-06 financial year, equivalent to 6p on every first and second-class stamped letter.

"At the same time, profitable business mail is being targeted by competitors who will handle around 2.5 billion unstamped business items this year.

"This underlines the need for Royal Mail to continue to rebalance its prices in line with costs, and supports our new pricing system introduced in August 2006 where postage is based on the size and weight of an item," added Ms Clarkson.