Rail fares could rise by 8%

Passengers could see rail fares soar by as much as 8% if the transport department suffers big cuts in the spending review this autumn.

Rail fare increases are normally calculated using July’s inflation figure, plus 1%. This year July's retail price index (RPI) figure, which will be confirmed tomorrow, is expected to be 5%, which means passengers could face fare hikes of around 6%.

However, the government has warned that the existing fare formula may have to change to allow increases of as much 2% or 3% above inflation if the department of transport suffers large spending cuts in the government spending review this October, according to the BBC. However no decision has yet been confirmed.

Philip Hammond, transport secretary, said: ‘This is not a normal year. The scale of the financial crisis that we have inherited means that we will have to make some tough decisions in the spending review which concludes this autumn. I am therefore not yet in a position to determine next year’s fare increase’. 

‘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,’ he added.

Ashwin Kumar, rail director for Passenger Focus, meanwhile said: ‘We hope train companies show restraint and passengers won’t see the double digit fare rises that we saw on some journeys in 2009’.