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Royal Mail set to be relegated from FTSE 100 Index

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Royal Mail is to be relegated from the FTSE 100 nearly four years after its controversial privatisation.

Shares in the delivery business have fallen by more than 15% so far this year as it faces a cocktail of headaches including declining letter volumes and rumblings of industrial action.

Its price was up nearly 1% in Wednesday trading and, at just over 390p, was still worth more than the 330p the Government sold the stock for in October 2013.

But that was not enough to save it from the axe as it has not kept pace with the increasing value of its top-flight counterparts.

An official stock market review means that, together with troubled doorstep lender Provident Financial, it will drop into the FTSE 250 Index after close of trading on 15 September.

Nicholas Hyett, equity analyst at Hargreaves Lansdown, said Royal Mail continued to face tough market conditions.

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