Rail ticket prices may rise sharply next year

Commuters could have to pay significantly more for rail tickets next year after the Government failed to rule out higher-than-usual fare increases ahead of the inflation figures due out today.

Under the current pricing system, the cost of tickets goes up by one per cent more than the July retail price index – a measure of inflation.

Stubbornly high inflation is expected to trigger another open letter from Bank of England Governor Mervyn King to the Chancellor today when the figures on the cost of living are published, with experts predicting the official Consumer Prices Index (CPI) benchmark will edge down marginally from 3.2 per cent to 3.1 per cent – but will still be well above the two per cent target.

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January's VAT rise to 17.5 per cent as well as recent pressure from rising food costs has kept the CPI above three per cent throughout 2010, but annual wage growth has slowed to 1.3 per cent – squeezing incomes.

With the rail price model in place, a 6.1 per cent rise for a commuter from Brighton to London would mean they would have to pay 216 more than the 3,556 they are now charged each year, according to reports.

But no decision has yet taken on whether the "RPI plus one per cent" formula will be changed as part of the spending review in the autumn.

Transport Secretary Philip Hammond said normally next year's regulated train fares would be calculated using July's inflation figure, plus one per cent "but this is not a normal year."

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The spending review would end this autumn, he explained. "It would be irresponsible, at a time when investment in the railway is under pressure, to rule anything out until the spending review is concluded."