The price of a first class UK stamp is to rise by two pence to 30p in April, the Royal Mail has said.
Will the first class price rise help Royal Mail lick the competition?
However, the price of a second class stamp will remain at 21p.
Royal Mail chief executive Adam Crozier said the change was to "reflect the true cost" of handling mail as it prepares for full liberalisation.
"Customers should pay prices that are related to the cost of the postal services we are providing," Mr Crozier said.
Mr Crozier added that Royal Mail lost 5p for every first class letter and 9p for every second class letter posted last year.
"Business customers cover those costs. As more competitors chase those big customers, we need to reduce that subsidy if we are to compete on a fair and equal basis," he added.
The Royal Mail added that while charges for stamps, Special Delivery and international mail and parcels will rise - some business customers will see charges fall.
Watchdog Postwatch, which recently urged people to use second rather than first class postage this Christmas as the service was more reliable, said it was "disappointed" with the decision.
The news comes just weeks after the Royal Mail revealed it was now making profits of £1m a day, with its letters business posting a profit of £26m for the six months to October - £89m up on the same period last year.