Royal Mail has announced that the price of first-class stamps is to rise by 14p to a record high of 60p, after pricing restrictions were partially loosened. A second-class stamp will go up from 36p to 50p.

Ofcom previously set a cap on the price of first-class stamps, but the regulator has allowed Royal Mail to set the price of first-class and business mail.  Second-class stamps remain capped at 55p but the limit will be linked to inflation.

The mail service has been running an annual loss of around £250m over the past four years as consumers and businesses have migrated to email. The number of letters posted daily has dropped from 84m to 59m.

The attempt to boost the Royal Mail’s revenue is linked to privatisation plans which could see the company sold or partially floated as early 2013.  

Moya Greene, the chief executive of Royal Mail, said that without the price rise the service was “at risk”. She added, “Royal Mail provides one of the highest quality postal services in Europe for among the lowest prices for both consumers and business. That service is under threat from declining volume, e-substitution and ever increasing competition.”