Rail fares to rise sharply after inflation figures revealed
Rail tickets will go up at the fastest rate for five years after the latest inflation figures were revealed.
The July Retail Price Index (RPI) figure is used as a cap for regulated rail fare increases for the following year.
The Office for National Statistics (ONS) has revealed July’s RPI rate of inflation was 3.6% – compared to 1.9% last July, and the highest since 2012.
The Consumer Price Index (CPI) rate was 2.6%, the same level as a month before.
The ONS highlighted that some of its broad groupings of goods, including food and non-alcoholic beverages, clothing and footwear, and furniture and household goods, “have edged up to the highest seen for several years”.
In better news, fuel prices have now fallen for five consecutive months.
RPI is usually higher than CPI by around one percentage point, although the CPI figure is seen as the official rate of inflation. The difference is because the RPI rate includes housing costs and there are slight differences to how the two rates are calculated.
Chris Williamson, chief business economist at IHS Markit, believes today’s data further reduces the prospects of an interest rate rise soon.
He said: “The lower than expected inflation rate for July adds to the belief that the majority of policymakers at the Bank of England will be more worried about economic growth that inflation in coming months.
“Risks remain biased towards the economy slowing further after a weak first half of 2017, with consumer spending dampened at the same time as business spending is hit by rising anxiety about Brexit.”