The price of a first class stamp will jump by 15p from the start of October, Royal Mail has announced, but it has kept the price of second class stamps unchanged.

The delivery company said that a first class stamp would rise in cost to £1.25 as the business was facing “increasing cost pressures” and a “challenging economic environment”.

The new price will come into force on Monday October 2 and means that stamp prices have more than doubled since 2012, the year before Royal Mail was privatised.

It also blamed the lack of reform of the so-called universal service obligation (USO). This forces Royal Mail to deliver letters six days a week to all 32 million addresses in the UK for the same price no matter where the letters are going.

It said that the price of a first class stamp is now the same as the median price in Europe, and at 75p a second class stamp is cheaper than the 94p European average. The UK is one of the most densely populated countries in Europe.

“We understand the economic challenges that many of our customers are currently facing and have considered the price changes very carefully in light of the significant decline in letter volumes,” said Royal Mail chief commercial officer Nick Landon.

“Letter volumes have reduced dramatically over recent years, down more than 60% from their peak in 2004/5 and 30% since the pandemic. It is vital that the universal service adapts to reflect this new reality.”

The company said “urgent reform” was needed to the service obligation.

It said: “Royal Mail has been clear that the cost of delivering an ever-decreasing number of letters to an ever-growing number of households six days a week is unsustainable.”

It said that research from 2020 by regulator Ofcom showed that providing a letter service only on weekdays would meet the needs of 97% of consumers and small and medium-sized businesses.

“Given the ongoing decline in letters, Royal Mail continues to call on Ofcom and the Government to review and modernise the USO to better reflect changing customer needs,” it said.