Stamp prices are set to increase by 1p from May after a row between the Royal Mail and the industry's regulator was settled.

The cost of posting a first-class letter is set to increase to 28p, while a second-class stamp will rise to 20p, generating an estimated £170 million of extra revenue in a year.

The price rises, the first for second-class stamps since 1993 and since 2000 for first class, have to be rubber stamped by Postcomm, but they are expected to come into effect on May 8.