Inflation has become a "nightmare” for commuting northerners

Inflation is the measure of how much goods and services have increased over a certain amount of time, usually measured from the same date in the previous year. For example, if a loaf of bread cost £1 in May 2022 and £1.05 in May 2023, the inflation rate would be 5%.

An increase in inflation means spending power is decreased and more money is required to buy the same amount of goods.

According to the Office for National Statistics (ONS), the inflation rate in April was at 10.1%, five times over the Treasury’s target rate of 2%.

However, the headline double-digit number is only an overview of the overall market volatility. Inflation has impacted different commercial activities at different scales and the transport sector is the worst-hit industry in the UK.

Using a value of 100 in 2015 as a baseline, the CPI of travel and transport services skyrocketed from 120.9 in March 2021 to 135.2 in March 2023, higher than any other sector in ONS’s records.

Transport plays an important role in CPI calculation. It ranked fourth in the ONS weighing, just after bills, housing, recreation and hospitality services such as restaurants and hotels.

Dr Peter Levell, an associate director of the Institute of Fiscal Studies, said: "The overall increase in transport fare is due to the increase in fuel cost. Transport companies are passing on their operating costs to passengers by raising fares so that they can make profit.”

Increase in fare means costs for transport would take a bigger proportion out of peoples pay, making it harder for them to afford other things as they cannot cut down on commuting.

If transportation prices drastically increase, consumers may find it harder to access basic services or engage in recreational activities since they will need to budget more money for transportation.

The transportation industry plays a significant role in the supply chain of many businesses and other costs related to using public transportation, such as fuel, can be particularly susceptible to increases in inflation.

The high volatility of transport costs means it can be affected by a variety of market and economic conditions. Just one of these elements being impacted can mean affecting the wider economy.

People living in the north of England, in particular, have fewer public transport alternatives than people in other parts of the country and are more likely to experience the fare hike.

Dr Levell added towns in Scotland and rural areas in north England are also more separated from each other.

These factors result in northerners relying more on driving their cars to get around, which has raised the demand for gasoline and the region's overall inflationary pressure.

Calculation by Centre for Cities, an independent and non-partisan urban policy research think tank, found the cost-of-living crisis in the north of the UK is worse than the south.

People living in Scottish cities like Glasgow and Dundee, as well as towns in north England such as Bradford and Burnley, faced inflation up to 11.67%, while Londoners and those living in South England areas, such as Reading and Milton Keynes, experienced a lower inflation of 9.3% to 9.4% in March 2023.

Dr Levell said although everyone in the country suffers from high inflation, northerners and Scots tend to have greater impact because climate in Scotland and north England tends to be chiller.

These regions are closer to the arctic circle and are more susceptible to cool jetstream floating from the Atlantic Ocean.

In wintertime, people up north turn on their heating and lights longer because of shorter daylight time, driving up their electricity consumption and bills.

At the same time, the current rate of inflation has exacerbated the long lasting North-South divide caused by not just a difference in living standard, but also how much money workers earn.

ONS showed the median monthly salary close to and in the capital remains the highest, particularly in Wandsworth (£3,412) and Westminster (£3,321), and it gets lower the further north you live, for example in Sheffield (£2,027) and Inverness (£2,170).

“Pay growth is much less in the public sector than in the private sector, especially in the north where public sector employment is important”, Dr Levell said.

“There is an economic phenomenon known as agglomeration. People who work near each other are more productive, particularly skilled workers.

“A firm in London benefits from the fact there are skilled scientists there, as well as lawyers and investors they might need. If they want to talk to the media and the ministers, they are all there.

“There is a disadvantage if you move away from everything else so you can’t really get business to relocate to the north.”

Researchers at the Institute for Public Policy Research blamed "vast inequalities" and "systematic underinvestment" in research and development, social infrastructure and transport for the lack of economic stimulation and productivity in the north.

Dr Levell added policies that help to reduce the cost of goods and services, such as reducing taxes or increasing subsidies for certain industries, could be implemented to help families across the country.

By providing people with a variety of transport options and promoting socially sustainable alternatives, the government can achieve a more balanced range of transport options by encouraging more economically and environmentally friendly travel to the general public.

The government has been promoting the Levelling Up programme to help northern regions, encouraging local authorities to invest in infrastructure projects or to support the development of key industries, which can bring more job opportunities and stimulate economic growth.

Dr Levell said: “In the short run, the effects may not be immediately visible to northerners and scots, but the programme can see potential long-term benefits.”

He believes these policies can reduce the burden of transport costs and the regional disparity.

The Bank of England predicted inflation rate will fall to 5% by the end of this year and back to the 2% goal by late 2024 thanks to a fall in energy prices, which people will start to experience in the next few months.

But even when inflation falls back to normality, commuters still should not expect train tickets to go back to where they used to be.