Train fares are set to rise again in the new year, by an amount greater than the recent (probable) peak in inflation. No significant new investment has been announced, expect FirstScotrail to pocket the whole of its maximum-allowed increase as profit.

APOC, the train operators union has announced its 2009 rail fare increases (figures discreetly placed at the bottom of the press release). In what's becoming something of an annual ritual, the rise is greater than the rate of inflation.

First Scotrail, the profitable near-monopoly provider in Scotland are set for a rise of 6% on their fares. Among the list of justifications for the increase listed by APOC are a range of investments in rolling stock and infrastructure. None of these appear to apply to services in Scotland.

Adding insult to injury this year, while both the inflation rate and the price of oil have been extremely volatile over recent months, this appears not have been considered in the price rise.

The inflation rate used to base the rise, 5%, is considered to be at its peak level for the near future. The Bank of England's recent huge interest rate cut was brought about by fears that the economy needed to be restarted and that the inflation rate was so likely to be on the way down that they could cut the interest rate without fear of the inflation rate rising.

So for the next year, fares will rise by 6%, despite the likelihood of this becoming 2 or 3 times the rate of inflation. (Remember this when it comes to pay review time!)

Equally, the price of oil has dropped from ~$150/barrel to ~$50/barrel. Claims of increased costs from First and others should be taken with a mine of salt. This is another drop that they aren't likely to give back unless pressured to do so.