Rail fares could increase by 3.6 per cent next year (From Your Local Guardian)


Rail fares are set to rise by around 3.6 per cent in January next year, affecting commuters as season tickets and some return fares.

The release of the latest Retail Prices Index (RPI) inflation figures today affects just under half of rail fares in England, Scotland and Wales – because the government links ‘regulated’ fares to this index.

The government has to approve the increase, and the figure acts as a maximum that rail companies can increase fares by.

The announcement comes on a day of rail chaos, with continued, planned works at Waterloo added to an earlier train derailment leading to long delays on South West Trains services. This resulted in the company advising passengers against travelling at all.

There was also disruption to Southern services on the same line.

The Office for National Statistics (ONS) said the Retail Price Index (RPI) measure of inflation, which is used to calculate train ticket prices, rose by 3.6 per cent in July, up from 3.5 per cent in June.

It came as Consumer Price Index (CPI) inflation held steady at 2.6% last month, the same rate as June. While the outcome was below economists’ predictions of 2.7 per cent, CPI remained above the Bank of England’s inflation target of 2 per cent.

James Tucker, ONS head of consumer price inflation, said: “Falling fuel prices offset by the costs of food, clothing and household goods left the headline rate of inflation unchanged in July.”

However, he warned against using RPI, saying it was “not a good measure” and the ONS does not “recommend its use”. Sterling, already under pressure amid political confusion over Brexit, dipped on the news.

The pound was trading 0.3 per cent lower against the dollar at 1.29 and 0.1 per cent lower verses the euro at 1.09 euros.

Households have seen their spending power come under sustained pressure from lacklustre wage growth and higher inflation, triggering an increase in credit and a decline in savings.

Your Local Guardian:

Rail fares v the cost of living (PA graphics)

The ONS said the main downward impact on the cost of living came from a drop in fuel prices, which sank by 1.3 per cent between June and July after growing by 0.7 per cent over the period in 2016.

Petrol fell by 1.4p month on month to 113.9p per litre, while diesel slipped by 1.7p to 115.6p per litre. The decline was countered in part by food prices notching 0.1% higher month on month in July after falling by 0.2% over the period last year.

Your Local Guardian:

Petrol prices fell by 1.4p month on month to 113.9p per litre (Nick Ansell/PA)

Meat and other items such as sauces became more expensive in July, the ONS said. Clothing and footwear prices were putting upward pressure on CPI after recording a smaller fall of 3 per cent between June and July, compared to a 3.4 per cent drop last year.

Utility bills were also pricier last month, with electricity, gas and other fuels lifting 0.8 per cent between June and July after coming in flat over the period in 2016. The jump was partly caused by energy giant EDF hiking electricity and gas prices towards the end of June. #

The Consumer Price Index including owner-occupiers’ housing costs (CPIH) also remained at 2.6 per cent in July, in line with the rate for June.

CPIH is the ONS’s preferred measure of inflation, which includes costs associated with living in, maintaining and owning a home.

A Treasury spokesman said: “Although inflation is likely to start falling next year, we understand some families are concerned today about the cost of living.

“That is why we have given the lowest paid a pay rise through the National Living Wage and are cutting taxes for 31 million people.”



Source : http://www.yourlocalguardian.co.uk/news/local/topstories/15473799.Rail_fares_could_increase_by_3_6_per_cent_next_year/?ref=rss

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