Train passengers are facing a hike in fares by as much as 5.8% next year as new inflation figures revealed a high-than-expected rise in prices.
The Office for National Statistics (ONS) announced on Wednesday that the Consumer Prices Index (CPI) had risen from 3.6% in June to 3.8% in July.
Economists had expected a 3.7% rise in the CPI for last month.
Meanwhile the Retail Prices Index (RPI) measure of inflation - which has traditionally been used by the Government when calculating annual rises in regulated train fares - was revealed to have shot up from 4.4% in June to 4.8% in July.
That spells bad news for rail users now facing a crippling rise in fares next year.
The Government has not confirmed how it will determine the cap on regulated train fare rises in England in 2026, but this year’s 4.6% hike was one percentage point above RPI in July 2024.
A similar formula would mean rail users being hit with a 5.8% rise in fares in 2026.
Pressure group Railfuture recently said “it would be outrageous” if fares even rose by as much as 5.5%.
July’s inflation rise means the headline rate remained at the highest level since January 2024, when it hit 4%.
The ONS said the school summer holidays helped bump up travel costs last month, which helped drive up inflation across the UK.
Grant Fitzner, the ONS's chief economist, said: “The main driver was a hefty increase in air fares, the largest July rise since collection of air fares changed from quarterly to monthly in 2001.
“This increase was likely due to the timing of this year's school holidays.
“The price of petrol and diesel also increased this month, compared with a drop this time last year.
“Food price inflation continues to climb - with items such as coffee, fresh orange juice, meat and chocolate seeing the biggest rises.”
Chancellor Rachel Reeves said there was “more to do to ease the cost of living” following the latest inflation figures.
She said: “We have taken the decisions needed to stabilise the public finances, and we're a long way from the double-digit inflation we saw under the previous government, but there’s more to do to ease the cost of living.
“That’s why we’ve raised the minimum wage, extended the £3 bus fare cap, expanded free school meals to over half a million more children and are rolling out free breakfast clubs for every child in the country.
“Through our plan for change we're going further and faster to put more money in people's pockets.”
The Department for Transport (DfT) said there will be an update on changes to regulated fares later this year.
About 45% of fares on Britain's railways are regulated by the Westminster, Scottish and Welsh Governments.
They include season tickets on most commuter journeys, some off-peak return tickets on long-distance routes, and flexible tickets for travel around major cities.
Operators set rises in unregulated fares, although these are likely to be very close to regulated ticket increases because their decisions are heavily influenced by governments.
A DfT spokesperson said: “The Transport Secretary has made clear her number one priority is getting the railways back to a place where people can rely on them.
“The Government is putting passengers at the heart of its plans for public ownership and Great British Railways (GBR), delivering the services they deserve and driving growth.
“No decisions have been made on next year's rail fares but our aim is that prices balance affordability for both passengers and taxpayers.”
The Government is nationalising train operators as their contracts expire.
GBR is an upcoming public sector body that will oversee Britain's rail infrastructure and train operation.
