UK's newly-privatised Royal Mail to raise stamp prices
LONDON (Reuters) - Britain's newly-privatised Royal Mail Group has announced above-inflation increases for the price of stamps, the first rises for two years and stoking anger among critics who say taxpayers were short-changed in the company's sell-off.
Royal Mail shares have surged 85 percent since the government sold off part of its stake, leading unions and opposition lawmakers to argue it was privatised too cheaply.
The company said on Friday the price of a first class stamp would rise by 2 pence, or around 3 percent, to 62 pence, while second class stamps would cost 53 pence, up 3 pence or 6 percent, with the changes due to come in on March 31.
British inflation fell to 1.9 percent in January, the first time in more than four years that it was below the Bank of England's target of 2 percent.
"Ministers have given the country's postal provider free rein to raise prices which will have an impact on vulnerable customers and small businesses who rely on using Royal Mail stamps," said opposition Labour Party lawmaker Ian Murray.
Royal Mail said the increases were needed to keep pace with its costs and that it could have hiked second class prices to as much as 57 pence under its current regulatory framework.
"We understand that nobody likes to pay more, especially in the current economic climate. Our prices remain amongst the best value for money in Europe," said Stephen Agar, Royal Mail's managing director of consumer and network access.
Two years ago, Royal Mail hiked first class prices by around 30 percent.
Royal Mail operates a six-days-a-week, one-price-goes-anywhere universal service which it says has annual costs of 7 billion pounds ($11.7 billion).
It is facing a challenge to its dominance from TNT Post, owned by Dutch mail group PostNL, which wants to establish a complete British delivery network by 2015.
Royal Mail shares were up 1 percent to 609 pence at 1322 GMT, within a FTSE-100 blue-chip index down 0.2 percent.
($1 = 0.5998 British pounds)
(Reporting by Sarah Young; Editing by Mark Potter)
