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Surprise increase in inflation triggers train fare hike

CPI inflation rose unexpectedly in July, the Office for National Statistics (ONS) has revealed.

The annual inflation rate rose from 2.4% in June to 2.6% in July, driven largely by a sharp increase in air fares following the start of the holiday season and the 2012 Olympic Games.

Levels of discounts on clothing and footwear also fell, following the introduction of sales earlier in the summer, in response to the poor weather.

Meanwhile, the retail prices index (RPI) figure also rose from 2.8% to 3.2% in July, triggering the announcement that rail fares, which are linked to the RPI, will rise by an average of 6.2% from January.

The news has angered transport and commuter groups. Mike Hewitson of Passenger Focus commented, ‘This is another inflation-busting increase. There is only so much you can squeeze passengers’.

The recent quarterly inflation report from the Bank of England suggested that CPI inflation would return to its 2% target by the end of the year, and continue dropping to reach 1.7% over the coming two years.