Commuters brace for record rail fare hike Business

Commuters are on track to be hit by the biggest increase in rail fares since records began, according to official inflation projections.

Fares will rise by around a tenth if ministers persist in pegging them to the retail price index (RPI), the government’s unofficial measure of inflation.

ROI will average 9.8% in 2022, according to the Office of Budget Responsibility. It will reach 10.5% in April and peak at nearly 11% in the last three months of the year.

Rail fare increases are generally tied to the inflation rate of the previous July. Government data goes back to 1996.

Ministers could be forced to reduce commuter pain by imposing a minus 1pc RPI increase, a measure which was last used in 2003. Even so, such an increase would eclipse the previous record single-year increase , about 6 pc, which was recorded in 2009 and 2012.

Tory MP Stephen Hammond, a former transport minister, said the link with RPI should now be severed alongside broader reform of rail fares.

Critics have long argued that fare increases should at least be pegged to the official consumer price index, and usually lower. Bosses have argued this will make it difficult for the industry to balance the books, as unions tie pay deals to RPI.

Commuter groups have warned that soaring rail prices risk forcing commuters back into their cars and worsening the cost of living crisis.

Norman Baker of the Campaign for Better Transport said: “Rail fares are already too high and don’t offer the kind of value for money that encourages people to take the train.

“A 10% hike next year could be the straw that breaks the camel’s back. When the Chancellor chooses to cut fuel taxes for drivers while presiding over record fare increases for passengers on transit, it is clear to see where the government’s priorities lie.

“We cannot hope to reduce carbon emissions from transport and tackle climate change unless people drive less and the government puts in place financial incentives to help people choose more sustainable means of transport. “

Emma Gibson, director of London Travelwatch, added: “This will be worrying news for people already struggling with their living costs and could be the deciding factor in some commuters taking a permanent break from their journeys, especially if they can work from home.

“Our recent research shows that if fares increase, people expect more for their money in return, rather than the train timetable reductions that are happening now.”

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This notice was published: 2022-03-24 06:00:00

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