Royal Mail hikes postage prices in line with Brexit-charged inflation

Royal Mail is hiking the price of first- and second-class postage stamps by amounts in line with UK's Brexit-charged rate of inflation, adding to the increasing shop-counter burden faced by consumers.

It would lift the price of second-class stamps by 1p to 56p from 27 March, a rise of 1.8%. First-class stamps would rise by 1p to 65p, a gain of 1.6%.

A stamp on a large first-class letter would rise 2p to 98p, a rise of 2.1%, while the price of a large second-class letter would gain 1p to 76p, a rise of 1.3%.

Royal Mail said the rises were needed to maintain its universal service, which is the delivery of letters UK-wide for the same price.

The price hikes were in keeping with the latest figures on UK inflation.

The UK consumer-price index, an inflation gauge, for January came in at 1.8%, which was below both the 1.9% expected by the market but nonetheless still camped out just below the Bank of England's targeted 2%.

UK inflation has been marching higher since the polarising Brexit referendum in June last year, the outcome of which saw sterling nosedive and consumer prices press higher.

Royal Mail said it had mulled the price changes carefully as it understood how difficult it was for households and companies in the present economic environment.

In March this year Prime Minister Theresa May plans to trigger an up to two-year process that ends with UK quitting the EU.

Bank of England chief economist Andy Haldane warned earlier this week that he sees UK inflation above 2% for three years.

"Inflation is picking up and is likely very soon to exceed its 2% target and to remain above that target for the next three years," said Haldane.

"This is almost entirely the result of the effects of sterling’s depreciation last year on import prices."