Image: © David Iliff via Wikimedia Commons

Rail fares could be lower if we calculated inflation differently

Using another formula would bring prices down – but it'd bring wages down with it

Rail fares will go up by a maximum of 3.2% next year – but that figure could be lower if the government updated its calculation methods.

What it means: Technical bit coming up. Rail fares go up because of 'inflation', i.e. the change in prices over time.

How do they know how much prices have gone up recently? There are a few ways to find out. One is called the Consumer Price Index, and the other is the 'Retail Price Index'.

The difference between the two comes down to the math of how they're calculated. RPI is basically always about 1% higher than CPI, and economists increasingly agree that it's probably too high an estimate of price rises.

But rail companies still use that method, instead of the more internationally accepted 'CPI', to calculate how much rail prices should go up.  In this case, it'll be about £150 per long-distance journey customer per year.

So why not switch to CPI? The thing is, inflation doesn't just affect prices: it affects wages, too. So unions are worried that a move to CPI would be good for consumers but bad for workers who'd get lower wage rises as a result.

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Reader Comments

  • RW

    Your right to a degree. You mentioned “the wandering Jew”.

    I elaborate that the Jewish people, historically have tended to migrate almost exclusively to locations that are economically and culturally vibrant already. I would speculate that Jews have thrived in these places and have often improved the bounds of their economies and knowledge base.

    You can also ask; how many massive entertainment conglomerates, Nobel winners or billionaires has Isreal developed? If Jews are so capable, why isn’t Tel Aviv the Rome of our time?

    Jews are successful because they value education, maintain a strong social cohesive, they actively monitor and have a good sense for Zeitgeist wherever they are and they carefully choose the places they settle and congregate themselves heavily in these choice locations.

    But most importantly (haulocaust increased the importance of this aspect), they actually designed their culture for success. They not only attend Harvard, they use what they learned to better the group as a whole. With as much, they studied intricate networking systems, adapted to it and in many cases improved upon them. (See how Japan acquired Aegis warships and made them better).

    Of course there is nothing wrong with any of this. It’s when you elaborately gain disproportionate power in any society where you would stand out, you must take care when attempting to make a society better (Civil Rights movement) and rewriting that society all together (mass immigration). Ask blacks in China, Mexico, Philippines or India how much opportunity they have? Go to businesses owned by their American diaspora and see how many blacks they hire. Go to Silicon Valley and see how many East or South Asian tech workers wish they could work with more black people. California might work as a state, but as a nation, I think your rolling the nuclear dice here. I hope we can succeed as a tolerant pluralistic superpower but at this stage in human societal development, it’s a pipe dream.

    And if Jews really are the icon for success, they would see that fundamental human successes happen over generations. Just look at the rest of the planet? Are we ready?