Train passengers face 3.5% price hike
Train fares will rise by an average of 3.5% from January next year, it has been revealed.
The price hike is determined by July's Retail Price Index (RPI) inflation rate - which was announced this morning as 2.5% by the Office for National Statistics – with the price of regulated fares including season tickets rising by RPI plus 1%.
Passengers on some networks and routes could face even higher ticket prices because train fares can increase fares by as much as 2% above average as long as that average remains at RPI plus 1% under a "flex rule."
The rise has been met with dismay by campaign groups, which have long been demanding cheaper fares. The Campaign for Better Transport (CBT) said the January increase will take the overall rise in fares to nearly 25% during this Parliament alone, with wages rising by just 6.9% in the same period, while Labour said it would abolish the flex rule if it returns to power.
According to the CBT some commuters to and from London will now be paying more than £7,000 a year for their season tickets, while an annual ticket from Warrington to Manchester will now set commuters back £1,491.
Martin Abrams of the CBT said: "With people's wages stagnating and in some cases falling, the expense of taking the train to work has become a huge part of living costs.
"If the Government doesn't put an end to above-inflation fare increases quickly, ordinary commuters will be priced off the train and could be forced into agonising decisions such as moving house or quitting their jobs."
Shadow transport minister Mary Creagh added: "David Cameron has failed to stand up for working people struggling with the cost-of-living crisis. He's allowed train companies to sting passengers with inflation-busting fare rises of over 20% since 2010, costing them hundreds of pounds."
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).