Jan 18, 2019 | Retail
Mails regulator Ofcom today (17 January) issued its latest review of Second Class stamp safeguard caps.
Back in March 2012, Ofcom imposed a price cap on Second Class standard letters. The cap was set for 2012/13, to increase by no more than inflation (CPI) for seven years. In July 2012, this safeguard was extended to large letters and parcels up to 2kg, and the body imposed a cap covering these products, which was also fixed in real terms (at CPI) for the control period.
Ofcom has now completed its latest review and has decided to raise the level of the Second Class standard letter safeguard cap by 5% in real terms, to 65p for the period 1 April 2019 to 31 March 2020.
The precise upper limit of the cap will be set at 65.2p from April 2019, but because Royal Mail increases its stamp charges in whole pence increments, the figures has been rounded down to the last whole penny (i.e., 65p).
“We have decided to maintain the current level of the basket cap (increasing it by CPI) for the same period,” said Ofcom in its statement. “These caps will ensure that the Second Class products remain affordable to consumers, while also giving Royal Mail an appropriate level of commercial flexibility. Each cap will rise by CPI inflation each year on 1 April until the end of the control period, on 31 March 2024.”
Ofcom’s decision will come into effect on 1 April 2019.
We’ll have more on this story in the February issue of The SubPostmaster.