Inflation to hit rail fare prices
Hard-hit rail commuters face average fare hikes of 8% in the new year, official figures have revealed, as the wider consumer spending squeeze tightens its grip.
The increase in regulated rail fares, which include season and saver tickets, is calculated by adding 3% to the headline retail prices index (RPI) rate of inflation for July, which remained unchanged at 5%, the Office for National Statistics (ONS) said.
But the 8% rise can be taken by train companies as an average, meaning passengers could face even higher increases in their commuting costs.
Elsewhere, the wider consumer prices index (CPI) rate of inflation increased to 4.4% in July, from 4.2% the previous month, triggering a letter of explanation from Bank of England governor Sir Mervyn King to Chancellor George Osborne.
The Government changed the formula for calculating rail fare increases from 2012 - from RPI plus 1% to RPI plus 3%.
The RMT-commissioned report by research company Just Economics also said the future "bleed" would amount to around £6.7 billion over the next 10 years.
The pressure on commuters comes at a time when all households are seeing their budgets squeezed by high inflation and muted wage growth - with utility price hikes announced by major energy suppliers including British Gas and Scottish Power.
The Bank of England expects inflation to hit 5% before the end of the year.
The increase in the CPI rate of inflation will apply pressure on the Bank of England to increase interest rates in a bid to curb soaring inflation.
Elsewhere, the underlying rate of retail prices index inflation, which excludes mortgage interest payments, remained unchanged at 5%.