No Post Office share sale

PETER MANDELSON, the Trade and Industry Secretary, is expected to announce greater commercial freedom for the Post Office today, but will stop short of a government share sale. The Post Office monopoly over domestic mail costing less than pounds 1 is to be diluted, with a big reduction in that ceiling. It may also lose its lucrative monopoly over direct mail, due to be abolished by 2003 under EU rules.

The Post Office is likely to be disappointed, as it had lobbied for partial privatisation in order to be able to borrow more with its borrowings taken off the public sector balance sheet. In the increasingly competitive postal market some of its European rivals have far greater commercial flexibility.