ROYAL MAIL has been given the go-ahead to hike stamp prices under lighter-touch regulation announced by the postal regulator.
Postcomm will allow the operator to increase prices on stamped mail by up to 10 per cent from next April, which could see the price of a first class stamp rise by 5p to 46p if the service provider chooses to take full advantage of the allowance.
The changes also give Royal Mail more freedom in markets where competition has been growing, including bulk mail, where the company has lost significant volumes to competitors.
Royal Mail could generate £380m a year under the changes, allowing it to stem falling profits ahead of a proposed sell-off.
The state-owned operator has been slated for privatisation by the government, which is looking for private investors to buy as much as 90 per cent of the company, retaining 10 per cent for an employee share scheme.
Potential investors will however be required to take on Royal Mail’s £10bn pension deficit, though today’s change could enable the operator to better its financial position ahead of a sale.