Train tickets price rise condemned

Pressure has mounted on Chancellor George Osborne to scrap an "untenable" policy which will see rail passengers hit with an average 6.2% fare rise next year.

Rail passengers face higher than expected price increases after the retail prices index (RPI) inflation figure for July, used to set regulated fares including season and saver tickets, surprised the City with a rise to 3.2% from 2.8% the previous month.

Mr Osborne has been urged to rethink a policy that allows train operators to increase regulated fares by an average of 3% above July's RPI figure in 2013, while some tickets will be able to rise by more than 11%.

That means the average season ticket will rise by £138 to £2,364 next year, while thousands of passengers are expected to shell out more than £5,000 a year for the first time.

Shadow transport secretary Maria Eagle said: "This is a Government that puts the wrong people first. David Cameron's decision to side with the powerful private train operators against commuters and passengers shows he is desperately out of touch with the cost-of-living crisis facing many hard-working families."

Bob Crow, leader of the Rail, Maritime and Transport (RMT) union, said passengers will be "rightly angry" when they find out the full extent of the fare increases and added that there is an overwhelming case for re-nationalising the railways.

Meanwhile, the rise in inflation triggered further fears about prospects for the UK's beleaguered economy.

With the closely watched consumer prices index (CPI) measure of inflation also surprising the City with a rise to 2.6% from 2.4%, there were fears that an acceleration in the cost of living will pile further pain on consumers and weaken the UK's recovery hopes.

A Treasury spokesman said: "Inflation has halved since its peak in September but any increase is disappointing. The Government knows how tough things are for families at the moment and that is why we have reduced income tax and frozen both council tax and fuel duty."

Vicky Redwood, UK economist at Capital Economics, said July's rise is likely to be a "temporary blip" and said she expects CPI to drop below its 2% target within the next three months, while the sluggish economy will keep inflation "very low" next year.