Rail season tickets 'up nearly 11%'

 

Hard-hit rail commuters are braced for more misery tomorrow when inflation figures are set to reveal that some season tickets will go up nearly 11% next year.

The July retail prices index (RPI), which is used to determine the following January's annual rise for regulated rail fares including season and saver tickets, is expected to come in at 2.8% when Office for National Statistics are released.

The average fare increase is calculated by adding 3% to RPI, meaning an average increase of nearly 6%, while some fares can go up by a further five percentage points as long as they are balanced by cuts on other tickets.

Elsewhere, the wider consumer prices index (CPI) rate of inflation is expected to remain flat at 2.4% between June and July, as lower food prices are offset by petrol price hikes and fewer discounts from retailers.

A CPI figure of 2.4% would still be its lowest level since November 2009, as inflation continues to fall from its peak of 5.2% in September, reflecting a slowdown in the global economy.

But it will be the RPI inflation that is likely to attract most attention because of its implications for beleaguered rail commuters, who have already suffered an 8% average increase in average prices this year.

The formula for calculating the rises for 2012 was changed to 3% on top of RPI from 1% as part of the Government's plans to reduce the taxpayer's support for rail fares and make passengers shoulder more of the costs.

Although inflation is falling back from its previous peaks, which means the rises should not be as high as last year, the Government is coming under pressure to rethink the formula for setting fares.

Stephen Joseph, chief executive of the Campaign for Better Transport, said: "If the Government sticks by its policy, rail fares will rise three times faster than salaries.

"With the economy flatlining this is untenable.

"The Government know they cannot continue to hit commuters."

Meanwhile, the CPI rate of inflation is set to remain flat in July after after a fall from 2.8% to 2.4% the previous month, as retailers put on fewer discounts than in June when the wet weather left them desperate to shift stock, while petrol prices have also started creeping higher.

However, CPI is expected to set to continue falling back towards its 2% target later this year.

It is hoped that this will give a much-needed boost to squeezed consumers, who have reined in spending since the financial crisis, and help lift the economy out of its longest double-dip recession for more than 50 years.

But there have recently been some worrying signs that inflation may not fall as quickly as hoped. A severe drought has ravaged much of the US corn crop, which is set to push up prices of grains and meat, while continuing tensions in the Middle East mean oil prices may rise again.

And in the UK, sharp increases in university tuition fees are also set to further push up the cost of living.

PA

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