The price of a first-class stamp is to increase by 2p to 36p from next April, while second-class stamps will go up by 3p to 27p, the Royal Mail has announced.
The postal organisation said stamp prices will still be among the lowest in Europe even after the increases come into effect.
Stamped mail makes a loss of around 6p per letter or packet - a total of £178 million last year - and it will continue to be loss-making, said the Royal Mail.
Luisa Fulci, Royal Mail's director of commercial pricing and policy, said: "For many years profits from business mail have funded stamped mail losses - but it's getting harder all the time to maintain that subsidy as competition for business mail from rivals, electronic communications and the wider communications market is increasing while mail volumes fall."
Business customers who use franking machines will continue to get a discount against the price of a stamp.
A franked, standard first-class letter will increase by 2p from 32p to 34p in April, while a standard second-class franked letter will rise 2p from 22p to 24p, increasing the discount for second-class franked mail discount from 2p to 3p.
For the first time, medium-sized businesses will get discounts on volume, so the more they post, the lower their postage bill will be, said the Royal Mail.
Postal watchdog Postwatch said: "The increase in stamp prices is above the level of inflation which we are not happy about, but the rise was expected."
Taken from http://extras.uk.msn.com/money/article.aspx?cp-documentid=7054612