Wednesday, 5 September 2012

Rail fare increases

The Welsh Government has not yet announced the basis for future railway fare increases. I beg them not to use the Retail Prices Index (RPI) as England and Scotland have done, but instead the Consumer Prices Index. This would align the cost of travel with pensions and other benefits.

There is moreover a built-in escalator effect on the RPI. It is based in part on the Carli Index - see wikipedia for explanations of the various price indices. (The other component is Dutot, also explained in that wikipedia entry.) As the writer says, "the BBC Radio 4 programme 'More or Less' noted that the Carli index, used in part in the British Retail Price Index measure, has a built-in bias towards recording inflation even when, over successive periods there is no increase in prices overall."

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