Today Royal Mail has announced price increases for first and second-class stamps that are intended to take effect from April 2006. First class stamp prices will rise by 2p from 30p to 32p and the price of second-class stamp by 2p, from 21p to 23p. Users of franking machines and those using Royal Mail's printed postage impression (PPI) service will get a 1p discount on both the new first and second-class prices.

The price increases are consistent with, and take maximum advantage of the upward pricing flexibility provided for in, Postcomm's final price control proposals for 2006-10 , which were published on 7 December last year.

All the changes in mail prices that Royal Mail have notified to their customers are subject to Royal Mail accepting Postcomm's final proposals by March 2006. If it chooses not to do so, Postcomm will promptly refer these proposals to the Competition Commission. If this happens the existing price control would continue until the Competition Commission has made its decision, which is likely to be in late 2006 at the earliest.

A Competition Commission reference would mean that Royal Mail could not implement the prices announced on 18 January. Under the existing control the maximum increase in stamp prices would be 1p for basic first and second-class stamps.