By Jonathan Davies

Regulated rail fares will be increased by 3.5%, following the announcement of July's inflation figures.

The UK rate of inflation as measured by the Consumer Prices Index (CPI) slowed to 1.6% in July, down from 1.9% in June.

The formula for rail fare increases follows the Office for National Statistics' (ONS) Retail Prices Index (RPI) plus 1%. The UK's rate of inflation as measured by RPI was 2.5% in July, down slightly from 2.6% in June.

Under a "flex" rule, train companies can increase fares by up to 2% above RPI, so prices could rise by 4.5% in some areas.

The new prices will take effect from January 2015.

The Labour Party said the government was ripping off customers, but the government defended the increase.

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