Railway users could soon enough see the price of their tickets soar as a result of inflation spiking to 7 per cent and not showing any sign of easing.
Economists argued fares could go up as high as 12 per cent from next year if the government doesn’t untie the increase in inflation rates and rail prices, as July’s retail price index is normally used to calculate the increase in rail fares for the coming year, the Telegraph reported.
According to Capital Economics’ Paul Dales, the retail price index (RPI) will go up 11.8 per cent this summer, prompting a £529 surge for a London to Brighton seasonal ticket.
The warning comes on the same day the Bank of England said it will continue to hike interest rates to chase the highest inflation rates in over 40 years.
City economists told City A.M. that the Bank, which has forecast inflation to reach over 10 per cent in October, will carry on with this policy for the time being.