The price of a first-class stamp has increased by 2p, up to 32p, in the second price hike in three years.

The price of second class stamps was also up to 23p, in a move that Royal Mail hopes will allow it to better compete with its rivals in the postal market. The market was opened up to greater competition in January, and Royal Mail wants greater freedom to increase its prices to allow it to better cope with the threat it faced from competitors.

Postcomm, the postal regulator, agreed in part to the increase because it said it recognised the problems Royal Mail was facing with its pensions deficit.

However, under the agreement with the postal regulator, Royal Mail committed to not increasing the price of a first class stamp above 37p.