Commuters face 1.6% increase in season ticket prices next year | Economic news

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Commuters face a 1.6% hike in rail fares next year – under a rule setting the increase at the latest inflation figure.

The July Retail Price Index (RPI), released by the Office for National Statistics (ONS), is used to cap increases in regulated fares, including season tickets on most commuter routes.

It is below the RPI of 2.8% in 2019 and the lowest since 2015, which means rail users are expected to face smaller price hikes next January than they did at the start. of this year.

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The regulated tariffs concerned include subscriptions on most suburban routes

However, there has been speculation whether the government will delay the 2021 hike to encourage more passengers to return after the lockdown.

Using the RPI figure to set rail fares is controversial as it is higher than the much more widely used measure of inflation from the Consumer Price Index (CPI), which was 1% in July according to the latest press release from the ONS.

Both measures were higher than economists had expected – and the highest since March – with an RPI dropping from 1.1% in June and a CPI at 0.6%.

The rise was in part attributed to soaring fuel costs – gasoline having risen the most in nearly a decade as international oil prices rebound from a collapse caused by the coronavirus crisis .

Fashion seasons and the sales calendar have also been shaken by the pandemic – so the drop in the cost of women’s clothing between June and July of this year was smaller than in 2019, putting upward pressure on the annual inflation rate.

In addition, the prices of dental care, physiotherapy and haircuts have increased as additional costs for protective equipment are passed on to customers.

The RPI figures for July are used by the UK, Scottish and Welsh governments to regulate around half of the tariffs.

In addition to many seasonal passes, these regulated fares include off-peak round-trip fares on long-distance journeys and tickets to travel anytime in major cities.

The RPI is used as a cap on these rate increases, so the overall increase once they are implemented could be smaller.

In January of this year, they increased by an average of 2.7%, according to the Office of Rail and Road, after the July 2019 RPI of 2.8%.

Railway companies are allowed to increase other fares such as advance tickets and long distance tickets at their discretion.

A 1.6% increase in season ticket increases next January could see the annual cost of the journey between London and Brighton increase from £ 80 to £ 5,060, a Barrow-in-Furness season ticket to Preston increase by £ 69 at £ 4,353 and an Edinburgh. – Glasgow fare climbs from £ 67 to £ 4,267.

Laura Suter, personal finance analyst at AJ Bell, said: “The surge in inflation over the past month is a blow to commuters.

“While many people have given up on the daily commute and are still working from home, it is unlikely that this will happen again on the same scale by next year when prices rise.

“Despite the hike, the price hike will still be lower than what commuters saw this year when prices rose 2.8%.

“But the continual years of sharp increases in inflation and the insistence on using the RPI measure to calculate price increases means that commuters are paying exorbitant fares. “

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