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Tuesday, 19 May 2009

Next year's train fares

In response to a quibble about cheap train fares only being available to web surfers, transport minister Andrew Adonis said the government was committed to improving the railways and was investing £15bn on railways over the next five years.

"We will also hold rail companies to their contractual obligations and we will not allow most fares to rise by any more than 1% above inflation next year," he added.

Old news, but all the more relevant in the light of the news to day that RPI (the relevant measure of inflation for train fare purposes) was 1.2% below its level last year in April, having falled 0.4% in the year to March. If maintained to the end of the year, this would mean no train fare rises. Sadly, regulations do not force the train companies to drop their fares when annual RPI falls below -1%, but such is life.

Passengers might well ask why it is that when interest rates and thus RPI rise, their train tickets increase in price, but when mortgage interest rates fall and they have more cash in their pockets, their ticket prices stabilise.

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