Price of first class stamp to rise again

The price of stamps will rise again on 2 April - the fourth increase in two years for the cost of sending a letter first class.

Royal Mail said the price of a first-class stamp would rise by 10p to £1.35 and second-class stamps would increase by 10p to 85p.

It comes after warning by the loss-making firm over the impact of higher costs and lower demand for letters.

Nick Landon, chief commercial officer at Royal Mail, said: "We always consider price changes very carefully, but we face a situation where letter volumes have reduced dramatically over recent years while costs have increased.

"It is no longer sustainable to maintain a network built for 20 billion letters when we are now only delivering seven billion.

"As a result of letter volume decline, our posties now have to walk more than three times as far to deliver the same number of letters as before, increasing the delivery costs per letter."

The company said that adults typically spent less than £7 a year on stamped letters and people now received two letters a week on average. It said the cost of stamps remained below European averages.

Royal Mail, which made a loss of £419m last year, has long-argued prices had to rise due to the lack of reform of the Universal Service Obligation (USO). This requires the company to deliver letters to all 32 million UK addresses six days a week.

Change to the service now seems inevitable, with regulator Ofcom recently setting out options for changes to the service that it says it wants to see publicly debated.

For more on the story of missed or late deliveries, watch Panorama on BBC iPlayer.

Reporter Zoe Conway speaks to Royal Mail insiders about problems facing the company and hears from its management about how proposed changes may help stave off multi-million-pound losses.