• July’s RPI rate rose to 1.6% - determining rail season ticket price rises next year
• Tunbridge Wells to London season ticket leaps to over £5,000
• RPI to be abolished – Government review due in Autumn
Laura Suter, personal finance analyst at investment platform AJ Bell, comments:
“The leap in inflation in the past month is a blow for commuters, as the July measure of RPI inflation is used for rail ticket price rises next year, meaning we’ll all be paying more to commute. The RPI measure of inflation rose from 1.1% in June to 1.6% in July – marking the highest rate since lockdown kicked in.
“While lots of people have ditched the daily commute and are still working from home, it’s unlikely that will still be happening at the same scale by next year when price rises come in.
“Despite the hike the price rise will still be less than the increase that commuters saw this year, when prices rose by 2.8%. But continual years of high inflation increases and the insistence on using the RPI measure to calculate the price hike means that commuters are paying sky-high fares.
“Commuters on popular routes will see their costs of getting to work rise again from January, with an annual Oxford to London season ticket including tube travel seeing a £100 hike from £6,288 to £6,388, while the annual cost of going from Tunbridge Wells to London (without tube travel) will leap over the £5,000 mark – rising by £79 to £5,007.
“The RPI measure of inflation has been classed as ‘flawed’ and is widely derided as an inaccurate measure of price rises. However, a Government review to establish a timeline for abolishing the rate and shifting to CPIH has been delayed by the current pandemic. The plans were due to be announced in March’s Budget but has now be shuffled to the Autumn, meaning an announcement may come alongside the Autumn Statement this year.”
