Rail fares will RISE by 3.8 per cent next March, Department for Transport confirms  1

Rail fares will RISE by 3.8 per cent next March, Department for Transport confirms 

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Rail fares will RISE by 3.8 per cent next March, Department for Transport confirms

  • Today’s move will heap fresh misery on households already hit with soaring bills
  • Ministers insisted rise was below the current RPI rate of inflation, which is 7.1% 
  • Said it struck a ‘fair balance’ and rise was necessary to ‘continue investment’  


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Britain’s rail fares will rise by 3.8% in March 2022, the Department for Transport (DfT) has announced.

The move will heap fresh misery on commuters – with households already hit by soaring energy bills and petrol prices.  

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The government said the rise was below the current retail price index (RPI) measure of inflation, which is 7.1%, the department said in a statement. The cost of train travel normally increases on the first working day of every year.  

Rail minister Chris Heaton-Harris said that capping rises in line with inflation 'struck a fair balance'

 Rail minister Chris Heaton-Harris said that capping rises in line with inflation ‘struck a fair balance’ 

Rail fares will RISE by 3.8 per cent next March, Department for Transport confirms  2

The headline CPI rate hit 5.1 per cent in November, significantly above the expectations of analysts and the highest for more than a decade

Rail minister Chris Heaton-Harris insisted the increase struck a ‘fair balance’. 

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He said: “Capping rail fares in line with inflation while tying it to the July RPI strikes a fair balance, ensuring we can continue to invest record amounts into a more modern, reliable railway, ease the burden on taxpayers and protect passengers from the highest RPI in years.

“Delaying the changes until March 2022 offers people the chance to save money by renewing their fares at last year’s price.

“That includes the 100,000 people who are already making savings with cheaper and more convenient flexible season tickets.”

The DfT also announced the Book with Confidence scheme will be extended until March 31 2022.

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This allows passengers to change their travel plans up until the night before departure, without being charged a fee, or cancel their tickets and receive a refund in the form of rail vouchers.

Andy Bagnall, director general of industry body the Rail Delivery Group, said: “The Government’s decision to hold fares down in line with July’s inflation is welcome compared to last year’s above-inflation increase and the rate of inflation right now.

“It is important that fares are set at a level that will encourage more people to travel by train in the future, helping to support a clean and fair recovery from the pandemic.

“We know the railway must not take more than its fair share from the taxpayer, which is why the rail industry is working to create a financially sustainable and more passenger-focused service that will both keep costs down long-term and attract people back to the train.”

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It came as Andrew Bailey delivered a stark warning about the inflation threat after the Bank of England shocked markets by hiking interest rates from their historic low.

How inflation threatens families and the public finances 

Inflation has long been seen as one of the biggest threats to economies.

In extreme examples, it has spiralled out of control and sparked panic.

The German Weimar Republic effectively collapsed after the value of the mark went from around 90 marks to the US dollar in 1921 to 7,400 marks to the dollar in 1921.

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In Zimbabwe between 2008 and 2009 the monthly inflation rate was estimated to have reached a mind-boggling 79.6billion per cent.

Although inflation has faded in the minds of Britons who have become used to ultra-low interest rates and stable prices, it caused chaos here in the 1970s.

Deregulation of the mortgage market, the emergence of credit cards and an overheating economy drove the rate to an eye-watering 25 per cent in 1975.

People would rush to buy goods with their wages after pay-day, as the costs were rising so quickly.

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Strikes erupted as there was pressure for pay packets to keep pace with prices.

Unemployment rose as the economy tipped into recession, and the government had to pump up interest rates in a bid to bolster the pound and control the surge.

That meant mortgage interest payments spiked into double digits.

And as a result servicing the national debt became a serious problem. 

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The Governor raised alarm that Omicron could drive prices even higher as well as stalling the economy, and gas costs are set to surge again amid Vladimir Putin’s sabre-rattling on the border with Ukraine.

In a grim assessment, Mr Bailey said that the Monetary Policy Committee ‘had to’ increase rates from 0.1 per cent to 0.25 per cent in the face of signs inflation will be ‘persistent’.

The Bank now expects the headline CPI to be 6 per cent by April, after the figure for November came in at an eye-watering 5.1 per cent yesterday – way above expectations and the highest for a decade.

The new anticipated peak would by three times the MPC’s target of 2 per cent.  

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Mr Bailey and his colleagues voted by 8-1 for the first hike since 2018, which will mean borrowing getting more expensive for some mortgage-holders.    

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. 

The move comes a day after the US Federal Reserve announced it is speeding up its tightening of credit in response to inflation reaching a 40-year high in November. 

Sterling jolted higher after the announcement, quickly gaining 1.1 per cent against the US dollar to 1.336, and 0.7 per cent against the Euro to 1.181. The FTSE 100 index was also up slightly on the day.

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‘We’ve seen evidence of a very tight labour market and we’re seeing more persistent inflation pressures and that’s what we have to act on,’ Mr Bailey said in an interview with broadcasters.

‘We’re concerned about inflation in the medium term. And we’re seeing things now that can threaten that. So that’s why we have to act.’

Mr Bailey said Omicron could ‘certainly have quite an effect on activity in the economy’ and there were already signs of impact on footfall among retailers and bookings at restaurants.

‘It’s not however clear whether it will cause inflation pressure to come down or even go up, and that’s I am afraid a very important factor for us,’ he said.

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