UK rail fares to see 3.8% inflation-linked rise in March

UK rail fares to see 3.8% inflation-linked rise in March
UK rail fares to see 3.8% inflation-linked rise in March   -   Copyright  Thomson Reuters 2021   -  
By Reuters

<div> <p><span class="caps">LONDON</span> – Many British rail fares will rise by 3.8% from March, the government announced on Friday, reflecting a broader increase in the cost of living as inflation heads towards a 30-year high.</p> <p>Price increases for around 40% of British rail fares are set by the government, affecting the cost of commuter season tickets, some long-distance off-peak return travel and peak travel near major cities.</p> <p>Normally fares rise each January by 1 percentage point above the rate of retail price inflation in the previous July. <span class="caps">RPI</span> is a long-running measure but the Office for National Statistics says it overstates the true rate of price increases. The more accurate consumer price inflation measure was 2.0% in July. </p> <p>For 2022 the government will limit the increase to July’s rate of <span class="caps">RPI</span>, which was 3.8%, and not apply the 1 percentage point extra increase. It will also delay the increase until March, as it did this year, when fares rose by 2.6%.</p> <p>“Capping rail fares in line with inflation while tying it to the July <span class="caps">RPI</span> strikes a fair balance, ensuring we can continue to invest record amounts into a more modern, reliable railway, ease the burden on taxpayers and protect passengers from the highest <span class="caps">RPI</span> in years,” rail minister Chris Heaton-Harris said.</p> <p>Britain’s transport ministry said it had spent 14 billion pounds ($19 billion) subsidising rail services during the pandemic, when passenger numbers slumped.</p> <p>The Bank of England forecast on Thursday that consumer price inflation would peak at a 30-year high of around 6% in April, after hitting a 10-year high of 5.1% last month. </p> <p>Rail fares could also be set for a big increase in 2023, as <span class="caps">RPI</span> already rose to a 30-year high of 7.1% this November.</p> <p>($1 = 0.7523 pounds)</p> <p/> </div>