The government will trim a plan to raise rail fares by as much as eight percent next year to offer some relief to commuters from rising costs at a time of economic uncertainty, a Treasury source said Saturday.
Chancellor George Osborne will announce the change as part of his autumn budget statement next Tuesday when Britain's fiscal watchdog is expected to slash its economic growth forecasts.
Rises in regulated fares - season tickets and peak travel fares - would be capped at 6 percent for 2012, at a cost of 300 million pounds, the source said.
The reduction is modest but the government hopes it will be welcome to families who have cut back on spending as wages fall behind inflation and unemployment rises, with the neighbouring euro zone crisis threatening to tip economy back into recession.
The money to fund the cap will have to be found from elsewhere in government budgets, as Osborne has vowed to stick to a deficit-cutting austerity program and not increase overall spending.
In July the government said it would stick to a formula which increases regulated fares each year by retail price inflation (RPI) plus 3 percent.
That formula, which covers national rail fares as well as bus and underground travel in London, will be trimmed to RPI plus 1 percent for 2012.
With RPI hitting 5 percent in July, the base month for the calculation, regulated fares were due to jump by 8 percent from January.
(Reporting by Tim Castle; editing by Andrew Roche)