Rail fares in England next year are to be frozen for the first time in 30 years, the government has announced.

The freeze until March 2027 will apply to regulated fares, which includes season tickets and off-peak returns.

The most recent fare rise, in March 2025, was 4.6%. Rail fares traditionally have gone up in January, based on the July rate of the retail price index (RPI) + 1% – although this formula has not always been followed.

The announcement comes days before the chancellor sets out the government’s financial plans in the Budget on Wednesday, with Rachel Reeves indicating that cutting the cost of living will be a key focus.

However, at the same time the chancellor is also widely expected to increase taxes to help fill a multibillion-pound gap in her spending plans.

About 45% of rail fares are regulated by the government in England, Wales and Scotland – but the freeze only relates to travel in England. The announcement also only applies to services run by England-based train operating companies.

Regulated fares include season tickets covering most commuter routes, some off-peak return tickets on long-distance journeys and flexible tickets for travel in and around major cities.

Train operators are free to set prices for unregulated fares, but they typically rise by similar amounts.

The government said freezing rail fares was intended to “directly limit inflation” by holding down “a major component of everyday costs”.

Since 2021, the annual increase has come in March instead of January.

A government source acknowledged it was possible unregulated fares would still rise, but insisted they usually followed regulated fares.

Unregulated fares increased by 5.5% in the year to March 2025, 1.1% above regulated fares – with a total increase in rail fares of 5.1% in that period.

Challenged over whether other ticket prices would rise to compensate for the freeze on regulated fares, Transport Secretary Heidi Alexander insisted the policy was “fully funded”.

She told the BBC’s Sunday with Laura Kuenssberg programme that regulated fares have tended to inform the price of unregulated fares and they normally “track against each other”.

Pressed on whether the policy would mean the government has less to spend on upgrading the transport system, Alexander said investment in the rail network would be protected “because we recognise that investing in the infrastructure of this country is the right long-term decision”.

The Rail Delivery Group, a representative body made up of the UK’s rail operators, said the freeze would be “good news for customers”.

“We want our railways to thrive, that’s why we’re committed to working with government to ensure upcoming railway reforms deliver real benefits for customers,” a spokesperson said.

Since 1996, the government has regulated some train fares following the privatisation of British Rail.

The freeze marks the first point since then that fares will have been frozen, although there have been periods where price increases were below RPI, and a dip in prices following the financial crash in 2010.

The government estimates that the move will save commuters on more expensive routes more than £300.

The chancellor said the freeze was being put in place to help ease cost of living pressures, and make “travelling to work, school or to visit friends and family that bit easier”.

The transport secretary said it was part of “wider plans to rebuild Great British Railways”.

Great British Railways is a public body which is in the process of being set up, and is part of the government’s plans to bring parts of the railway system into public ownership.

The government has said it will take over the running and management of the tracks and trains, “ending years of fragmentation, driving up standards for passengers, and making journey easier and better value for money”.

The government has said part of its plans for the new body is to “gradually move away from annual blanket increases”.

Labour said passengers had faced “relentless” fare increases every year under the previous Tory government.

However, shadow transport secretary Richard Holden said: “In government, the Conservatives kept fares on the right track with below-inflation rises and consistently called for no further hikes to protect hard-working commuters.”

New Delhi: Dr. Deepak Kumar Jaiswal, National Convenor of CONSENT and National President of the National Front of Indian Trade Unions (NFITU), on Saturday welcomed the Prime Minister Narendra Modi government’s new labour codes, calling them a landmark step toward ensuring dignity, safety and fair wages for India’s workforce.  

Speaking to IANS, he said the reforms reflect Prime Minister Narendra Modi’s commitment to strengthening worker justice and modernising India’s labour ecosystem in line with global standards. Dr. Jaiswal praised the provision of time-bound minimum wages, describing it as a historic initiative that will directly curb exploitation and bring long-overdue stability to labourers.

“The recent discussions with Union Minister Mansukh Mandaviya further reinforced the government’s intention to deliver reforms that genuinely benefit workers,” Dr. Jaiswal mentioned. He added that the new laws will bring visible improvements to the lives of millions of labourers.

Highlighting the focus on women in the workforce, Dr. Jaiswal applauded the rules ensuring equal pay and eliminating gender discrimination, as well as provisions for safer workplaces. He said women constitute half of the population and are increasingly part of the labour force, and the government has addressed their concerns with seriousness and sensitivity.

He also lauded the decision to extend social security coverage to more than 40 crore workers, calling it a major step that demonstrates the Prime Minister’s commitment to providing protection and respect to every Indian worker.

With 14 major organisations associated with NFITU, he said extensive consultations took place before the reforms were finalised, ensuring that workers’ voices were adequately represented. On the introduction of double wages for overtime and free health check-ups for workers above 40 years of age, Dr. Jaiswal said these measures clearly show that the Modi government places the dignity and quality of life of workers at the forefront.

Drawing a comparison with global labour systems, he said India’s laws are now moving on par with international standards. He added that while some unions in the past resorted to frequent strikes, the broader objective should always be constructive dialogue and appreciation when the government does the right thing.

Dr. Jaiswal remarked that earlier governments, including during the tenure of former Prime Minister Manmohan Singh, had not implemented such reforms despite repeated demands. He emphasised that NFITU is not politically aligned, but as a responsible trade union body, it would continue to raise its voice against any shortcomings and also acknowledge positive steps taken in the interest of workers.

Next week, the Chancellor will reveal the Government’s latest set of tax and spending policies as she also outlines her ambitions for the economy under the Labour Government.

The state of the economy is the key focal point ahead of the Budget, amid criticism from industry over the impact of the Government’s first Budget last year.

The state’s official forecaster will also lay out its key projections over how the economy is set to fare over the coming years, with fears that it could present a gloomy outlook in the short term.

Here the PA news agency looks at the importance of this Budget for the economy:

– What is the backdrop of the Budget?

The UK economy started the year with positive growth, with GDP (gross domestic product) rising by around 0.7% over the first quarter of the year.

Nevertheless, this had been boosted by stronger trade ahead of expected tariffs and came amid an increasingly uncertain global economic backdrop.

This growth has steadily slowed down as the year progressed, with the Office for National Statistics (ONS) reporting growth of 0.3% in the second quarter and 0.1% in the third quarter of the year.

The dip has come amid declines in the production sector as well as slower growth in the services sector.

Meanwhile, inflation has been elevated over the past year, striking a peak of 3.8% in July, August and September.

It dipped slightly last month – although at a slower rate than expected – but also comes amid a backdrop of falling wage growth.

Consumer finances had been supported by stronger wages but real wage growth has slowed significantly in recent months because of pressure in the labour market.

Unemployment has also lifted, striking a four-year-high of 5% in the three months to September.

– Why is the last budget important?

Weak hiring, slowing wage growth and price inflation have all been partly linked to policies which came into force following the Labour Government’s first budget last year.

The budget led to higher taxes and labour costs for many businesses when the policies came into force in April this year.

Firms were affected by the increase in the national minimum wage, higher National Insurance Contributions (NICs), reduced business rates discounts and other taxes, such as a new packaging tax.

The Bank of England highlighted that the increase in NICs and the minimum wage partly contributed to higher food price inflation earlier this year as impacted firms passed some of this on to their customers.

– What is the view of businesses ahead of the Budget?

Businesses and trade bodies have stressed that they came under pressure from the previous budget and have urged the Government to avoid hitting them with further increases.

Industry data has also shown that some business spending has been held back ahead of the Budget, with firms cautious about their financial position.

The latest monthly flash PMI economic data – which shows activity in the UK’s private sector – showed that activity was dented by cautious decision making from firms before the Budget.

– What is the view of consumers?

Consumer spending has also been broadly cautious in recent months, with Bank of England policymakers recently highlighting a focus on saving in favour of spending.

On Friday, the ONS said retail sales contracted in October for the first time in three months as shoppers also held off before the Budget.

Economists have cautioned that predicted rises in personal taxes at the Budget come mean that some consumers will reduce their spending plans rather than just delay them until nearer to Christmas.

Ruth Gregory at Capital Economics said: “The risk is that the fourth quarter isn’t a golden one for retailers and that higher taxes in the Budget restrain retail spending over the crucial festive period and going into next year.”

– Why has there been focus on the Government’s ‘fiscal hole’ and what does this mean?

The so-called “fiscal hole” is the gap between the Government’s projected spending and its projected revenues, typically through taxes or borrowing.

This is particularly important for the Government as it seeks to meet the fiscal rule that it must balance spending and revenues over the next five years.

Economists have predicted that a significant “fiscal hole” has grown since the last spending review, with spending reductions lower than expected because of failures to pass welfare cuts, increased borrowing costs and expected readjustment to productivity forecasts.

Nevertheless, reports have suggested that original predictions of a roughly £30 billion fiscal hole have now been reduced, with the Financial Times indicating the OBR think this will be nearer to £20 billion.

Last week, reports indicated the Government would therefore not push forward with expected increases to income tax as they did not need to raise as much money in order to plug this black hole.

On Wednesday, the Office for Budget Responsibility will reveal how much money new spending reductions or tax increases will generate in order to address this.

It will also unveil its latest forecasts for key economic metrics such as economic growth, unemployment and inflation.

– Will the Budget be important for the financial markets?

The Budget can impact trading in the financial markets, as has significant speculation about potential policy decisions.

Typically, the value of the pound and the price of gilts – government bonds – are the most likely to be influenced by budget policy.

Gilt yields, which rise as prices fall, ticked higher earlier this week but are still significantly lower than earlier this year as borrowing costs have drifted lower amid lower interest rates.

Both the pound and gilt prices tend to reach positively to cautious spending commitments and limited tax changes, particularly if they believe tax policy is likely to hamper economic growth or wider investment.

The FTSE 100 and other domestic equity indexes do not tend to be directly impacted by changes in domestic policy, although they can be influenced by fluctuations in the pound.

Stocks in specific sectors which are targeted by policy could however move in value.

For example, listed gambling companies have seen speculation of increased levies on sports betting press down on their share value.