Autumn Statement: Transport cost rises to ease
Rises in the cost of train fares will not be as not be as high as predicted in the New Year, Chancellor George Osborne confirmed in the Autumn Statement today.
The previously planned rise of RPI plus 3% was "too much", said Osborne. Fares will now go up by 6.2%, which is 1% above inflation, from 1 January 2012.
This will also apply to Transport for London fares, which cover transport links in the capital.
There is also some good news for motorists as a planned fuel duty increase of 3p in January has also been delayed to 1 August.
Karen Barrett, spokesperson for unbiased.co.uk, says: "The freeze on January's planned fuel duty rise will be a small relief to consumers and those motorists who rely heavily on their car to earn their living.
"The chancellor's decision to scrap the duty rise may not be a dramatic change, but it will go some way to helping the burden on people's everyday living costs."
Research from unbiased.co.uk this year shows that fuel duty is the number one tax consumers would like to see abolished, with 20% of people stating this was the tax that they wanted to be rid of the most.
Replaced as the official measure of inflation by the consumer prices index (CPI) in December 2003. Both the Retail Price Index and CPI are attempts to estimate inflation in the UK, but they come up with different values because there are slight differences in what goods and services they cover, and how they are calculated. Unlike the CPI, the RPI includes a measure of housing costs, such as mortgage interest payments, council tax, house depreciation and buildings insurance, so changes in the interest rates affect the RPI. If interest rates are cut, it will reduce mortgage interest payments, so the RPI will fall but not the CPI. The RPI is sometimes referred to as the “headline” rate of inflation and the CPI as the “underlying” rate.
An increase in the general level of prices that persists over a period of time. The inflation rate is a measure of the average change over a period, usually 12 months. If inflation is up 4%, this means the price of products and services is 4% higher than a year earlier, requiring we spend and extra 4% to buy the same things we bought 12 months ago and that any savings and investments must generate 4% (after any taxes) to keep pace with inflation. Since 2003, the Bank of England has used the consumer prices index (CPI) as its official measure of inflation (see also retail prices index).