Inflation misery hits train users as fares increase branded ‘kick in the teeth’

The latest Retail Prices Index (RPI) inflation figures confirm that rail fares will rise next year, with the only silver lining being that they’ll be below nine percent.

Ministers said on Tuesday any increase would be below the rise in the latest RPI measure, which was today announced to be nine percent.

Myron Jobson, senior personal finance analyst at interactive investor, told “The news will come as a kick in the teeth for those whose finances have been devastated by the double whammy of high inflation and high interest rates.

“The Government has vowed that any rise in rail fares in England next year will be below RPI.

“A similar announcement was made last year, and tickets were instead linked to the average earnings growth in July 2022. This led to the biggest hike in rail fares for more than a decade, increasing by 5.9 percent.

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“History could repeat itself if tickets are once again linked to average earning growth which has been on a record-breaking run.”

The Department of Transport has yet to confirm what metric will be used to decide how much fares go up but they will be implemented in March next year.

For this year’s increases, the Government used the figure for average earnings growth for the quarter to July 2022, which was 5.9 percent.

If they used this measure again, commuters could get another substantial increase as average earnings including bonuses increased in the three months to June 2023 to 8.2 percent.

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Mr Jobson said: “No-one likes prices going up and after a year of unreliable train services and rail strikes across the board, many passengers will be particularly disgruntled about the prospect of paying even more for the service. Many would rightly question whether they are getting value for money.”

Most commuter fares on Great Britain’s railways are regulated by the Westminster, Scottish and Welsh Governments.

They also regulate some off-peak return tickets for long journeys and flexible tickets for major cities, and cover a total of 45 percent of British fares.

Train operators set their own increases for unregulated rail fares but these will likely be very similar to the increase in regulated fares.

The operators’ price hikes are heavily influenced by the respective Government owing to contracts introduced during the COVID-19 pandemic.

The Scottish and Welsh Governments have yet to set out their plans for rail fares for 2024. Fares for rail passengers in Northern Ireland are set by operator Translink.

Also in the latest inflation figures, the CPI measure fell to 6.8 percent for the year to July, down from 7.9 percent in June, although core inflation remained at 6.9 percent.

James Longley, managing director at Utility Bidder, warned prices will not be dropping any time soon.

He told “The UK economy grew by a marginal amount of 0.2 percent between April and June, but recession threats still loom large.

“For those UK residents planning ahead for another hard autumn and winter, you need to be reducing your outgoings and tightening your belts when it comes to the weekly shop and treats, and build your earnings for the long term.”

Chancellor Jeremy Hunt said: “The decisive action we’ve taken to tackle inflation is working, and the rate now stands at its lowest level since February last year.

“But while price rises are slowing, we’re not at the finish line. We must stick to our plan to halve inflation this year and get it back to the two per cent target as soon as possible.”

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