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The prices of first and second class stamps are to rise by 1p from 27 March, Royal Mail has announced.

It will take the price of a first class stamp to 65p, and second class to 56p.

Royal Mail said the price rises were necessary to maintain the universal service - the principle that it delivers letters across the whole of the UK for the same price.

A stamp for large first class letter will rise by 2p to 98p. A large second class letter will go up by 1p to 76p.

The increases are in line with the rise in the Consumer Prices Index (CPI), which rose by 1.8% in the year to January.

Decline

Royal Mail said it understood how hard it was for many companies and households in the current economic environment.

For that reason, it said it had considered any pricing changes very carefully.

However, it added that UK stamps represented good value compared to the rest of Europe.

The average price of a first class stamp in Europe is 87p it said, while an average second class stamp is 67p.

Fewer people are sending letters, but Royal Mail is handling more parcels.

Letter usage declined by 6% in the nine months to December, the company said at the end of last year.