Train fares will be automatically cut if inflation falls into negative territory, despite pleas from rail companies.
The prices of so-called "regulated fares", which include season tickets and some off-peak journeys, are linked to the rate of inflation. Since this system was instituted inflation has always been positive, frequently leading to painful price hikes.
However, many analysts are predicting that inflation will become negative over the summer. This would mean an automatic fall in the price of regulated fares. These fares rise at 1 per cent above the rate of inflation, so a rate of less than -1 per cent would trigger price cuts.
The Department for Transport has revealed that the rail companies have pleaded with the government to suspend the system in the event of negative inflation. However, Lord Adonis, the transport minister, will today announce that the link will remain, and that rail prices will be allowed to fall - even if, as the rail companies claim, that puts some operators in financial jeopardy.
