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The Royal Mail is increasing the cost of postage, with first-class stamps rising 6p to 76p and second-class up 4p to 65p.

Prices will climb from 23 March, less than a year after they were hiked to their current levels.

The 65p second-class stamp is the maximum under an Ofcom price cap.

"These changes are necessary to help ensure the sustainability of the one-price-goes-anywhere Universal Service," Royal Mail said.

It blamed the increases on "a challenging business environment".

Tough market

Stephen Agar, managing director of letters at Royal Mail said: "We are operating in a tough market at present, under the threat of making a loss by 2021. These price increases will help us maintain the quality of service that is expected by our customers,"

The likelihood has increased that Royal Mail in the UK will be loss-making in 2020-21, the company said in a statement, adding: "We want to invest £1.8bn in the UK to turnaround, grow and sustain the Universal Service."

It said it understands that many companies and households are finding it hard in the current economic environment.

"As a result, we have considered any pricing changes very carefully and in doing so have sought to minimise any impact on our customers."

But the move has angered small businesses. "When the cost of doing business is already rising across the board, this latest rise in stamp costs for letters and for parcels is just another expense that small businesses will be forced to carry, affecting small firms that rely on Royal Mail as a major part of their business," said Federation of Small Businesses national chair Mike Cherry.

"We should be doing all we can to support small firms to grow and succeed, price hikes like this only prevent that. From next month it will be twice as expensive to post a letter as it was in 2006."

Communications watchdog Ofcom said: "Royal Mail has the flexibility to set its own prices in order to respond to a rapidly-changing market and safeguard the universal postal service. Ofcom imposed a cap on the price of a Second Class stamp to protect vulnerable consumers, and these price increases are within this safeguard.

"Royal Mail has assured us that these price changes will be clearly communicated to customers and we will continue to monitor its performance closely, to ensure that the postal market is working well for consumers."

Meanwhile consumer experts advised people to stock up on stamps before the price rise, to beat the increase.

Guy Anker, deputy editor of Moneysavingexpert.com said: "As stamps just say 1st or 2nd on them (Or 1st or 2nd large for the bigger ones) if you buy them now they are valid in perpetuity after.

"So while it's only pennies, if you're going to send even a big batch of Christmas cards, you may as well stock up now."