Inflation and the railway

[Ken H]

I think its generally accepted the UK is in for a nasty bout of inflation.

What effects will this have on the railway?

Will inflation help because of high fares rises allowed by the current mechanism each year?

Or will the railway lose out because of some items of expenditure rising in price faster than the general rate? Building materials perhaps? Or fuel.

And what about borrowing? Will a general interest rate rise - usually seen in inflationary times - cause problems with the finances?

And wage costs. Inflation can cause a fifficult industrial relations environment.

LT and national rail in scope. As are railways abroad.

 

[Fawkes Cat]

Or will the railway lose out because of some items of expenditure rising in price faster than the general rate? Building materials perhaps? Or fuel.

As bolded.

 

[Dr Hoo]

A look back to 1975 is always instructive. Amid rampant inflation of 24-27% rail staff achieved a staged 29.8% rise from a Labour government after the threat of a strike. (It was arguably quite a 'poor' deal, apparently the only one in the public sector to be under 30%.)

It had to be paid for, of course. Fares rose three times in a year, compounding to 50.7%. Services were cut by around 10%, Boxing Day trains went. Staff in the core railway dropped by 12,000 over the next two years. Passenger miles fell to their lowest ever level (except the badly strike-affected 1982). Construction of the Channel Tunnel had already been stopped in January because of the financial crisis.

But at least the celebrations for the 150th anniversary of the opening of the Stockton & Darlington Railway brought a warm glow to railway enthusiasts everywhere.