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Plans for Royal Mail revenue rise could hike stamp prices

Postal regulator to give mail service more commercial freedom, upping revenue by £75m a year.

Royal Mail is set to generate an extra £75m a year but stamp prices may go up further, according to plans laid out by Postcomm on Friday.

The UK postal regulator plans to give the mail service more commercial freedom by removing price controls from all parcels and packets weighing more than 750g. It may also allow Royal Mail to set its own prices on pre-sorted bulk mail and access services.

However, the proposal for next year could lead to an average rise of 2 per cent above inflation in the price of stamps. A first-class stamp will cost 44p, rising 3p from the current price, which was increased to 41p only a few weeks earlier.

Postcomm said the proposal was necessitated by a 15 per cent fall in mail volumes in the last four years. However, consumer groups say Royal Mail will have to significantly improve its services to justify the rise in postage costs.