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## Price of First Class Stamp Rises Again Amid Economic Pressures

**Published: October 2, 2023 – 5 hours ago**


The Royal Mail has announced another increase in the price of a first-class stamp, raising it from £1.10 to £1.25. This marks the third price hike in just 18 months. The rise is attributed to escalating cost pressures and the challenging economic environment faced by the postal service.

Amidst rising costs and “rocketing prices,” Citizens Advice, a charity, has called on Ofcom, the regulatory authority, to hold Royal Mail accountable for the price increases. Many households are struggling with their expenses, and the charity believes that the regulatory body should intervene.

However, Ofcom argues that pricing “flexibility” is necessary to ensure the financial viability of the postal service. Royal Mail also claims that the lack of reform in the Universal Service Obligation (USO)ÔÇöwhich mandates the delivery of letters to all 32 million UK addresses six days a weekÔÇödirectly contributes to the need for price increases.

While the price of a second-class stamp remains unchanged at 75p, Matthew Upton, policy director at Citizens Advice, criticizes Ofcom for allowing Royal Mail to increase prices despite its “poor service.” He emphasizes that Royal Mail holds a virtual monopoly over an essential public service relied upon by millions of people. Furthermore, he questions the decision to raise prices after the company failed to meet delivery targets throughout the summer.

In defense, Ofcom highlights that it caps the price of second-class stamps to ensure affordability, especially for lower-income individuals. With the postal market undergoing rapid changes, characterized by dwindling letter volumes and increasing parcel deliveries, Ofcom insists that Royal Mail requires flexibility in setting first-class stamp prices to ensure the sustainability of the universal postal service.

Royal Mail has been advocating for reform of the USO, claiming that the current system is unsustainable. The volume of letters sent annually has dropped from 20 billion in 2004-05 to seven billion in 2022-23, while the number of addresses has increased by four million during the same period, according to the company’s data. Citing a 2020 Ofcom research, Royal Mail suggests that a five-day-a-week letters service would satisfy the needs of 97% of consumers and small businesses.

The recent £1.10 price increase in April last year followed by another hike to £1.25 in April this year, indicates the financial challenges faced by Royal Mail. Nick Landon, the chief commercial officer, acknowledged the economic difficulties experienced by customers and justified the price adjustments by citing the significant decline in letter volumes.

Royal Mail’s parent company, International Distributions Services (IDS), reported an operating loss of ┬ú419 million for the fiscal year ending in March. Strikes in the previous year cost the company millions of pounds due to labor disputes regarding pay and working conditions. These strikes, along with other factors, contributed to widespread postal delays.

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