Shock jump in inflation in July
Inflation rises unexpectedly in July, which means bad news for rail passengers.
The Office of National Statistics has confirmed that the Consumer Prices Index (CPI) annual measure of inflation rose to 2.6% in July.
The Retail Prices Index (RPI) measurement also rose, from 2.8% to 3.2%.
The jump in was partly due to the increasing cost of transport (in particular air fares), clothing and footwear.
This follows a sharp fall in June, with the CPI measurement dropping from 2.8% to 2.4%, while RPI fell from 3.1% to 2.8%. Many retailers launched their summer sales early this year following the wet spring and early summer.
Inflation tracks how the cost of living is increasing. It’s also used to help work out changes in pensions, benefits and things like rail fares.
The Bank of England has a 2% target for inflation, a target it has consistently failed to hit. However, in its inflation forecast last week, the Bank suggested inflation is likely to fall below its target at some point later this year.
This month's figures are particularly important for rail commuters, as July's RPI figure is used to set the following year's fare increases. If the Government continues with its policy of allowing rail operators to increase season tickets by RPI + 3% in England it means the average commuter will pay 6.2% more for their season ticket from January. In Scotland, the figure is RPI + 1%. The Welsh and Northern Irish Assemblies have yet to announce their figures.
Demonstrations about the high cost of rail travel have been staged at major railway stations around the UK today.