The Department for Transport (DfT), has revealed that rail fare in Britain will increase by 3.8% between March 2022 and March 2022.
This move will bring more misery to commuters, who already face high fuel prices and rising energy bills.
In a statement, the government stated that the increase was lower than the retail price index (RPI), which measures inflation at 7.1%. Normally, the cost of rail travel increases every working day.
Rail minister Chris Heaton-Harris said that capping rises in line with inflation ‘struck a fair balance’
In November, the headline CPI rate was 5.1%. This is significantly higher than analysts expected and it has been the highest in more than 10 years.
Chris Heaton Harris is rail minister. He stated: “Capping rail fares to inflation and tying them to the July RPI strikes fair balance. We can continue to spend record amounts on a better, more reliable railway. This will ease the burden of taxpayers. And protect passengers from some of the most high RPI levels in many years.
“Delaying the changes to March 2022 gives people the opportunity to save money and renew their fares at last years price.
“This includes the 100,000 people that are making savings now with more flexible and affordable season tickets.”
Andrew Bailey issued a warning about rising inflation following shocks by the Bank of England, which raised interest rates significantly from their historical low.
Omicron’s potential to drive gas prices higher and stall the economy was raised by the Governor. Gas costs will continue to rise amid Vladimir Putin’s border-rattling with Ukraine.
According to Mr Bailey, the Monetary Policy Committee “had to” increase rates by 0.1% to 0.25% in light of the signs that inflation would be “persistent”.
Now, The Bank anticipates the headline CPI at 6 per cent in April. Yesterday’s November figure was a staggering 5.1 percentage. It is way higher than expectations and has been the highest since a decade.
This new target peak will be three times higher than MPC’s 2 percent goal.
His colleagues and Mr Bailey voted 8-1 to approve the first rate hike since 2018. It will lead to mortgage-holders having to borrow less.
Some economists had been urging the MPC to start increasing interest rates immediately to help prevent an inflationary spiral, but the Bank had been widely expected to wait until the impact of the Omicron strain is clearer.
This move follows a US Federal Reserve announcement that it will accelerate its credit tightening in the wake of inflation hitting a 40 year high in November.
After the announcement Sterling surged higher, quickly rising by 1.1 percent against the US Dollar to 1.336 and 0.7% against the Euro at 1.181. The FTSE 100 index was slightly higher on the same day.
In an interview with radio stations, Mr Bailey stated that he had seen signs of tight labor markets and more persistent inflation pressures. This is what he needed to address.
“We worry about inflation in the medium-term. We are seeing signs that could threaten this. We must act.
Omicron, according to Mr Bailey, could have a ‘certainly significant effect on economic activity’. Already there are signs that Omicron has had an impact on footfall at retailers and restaurant bookings.
His statement was: “It is not clear however whether this will cause inflation pressures to come down, or even go higher, and that’s it’s I’m afraid a very significant factor for us,” he stated.