REGULATED rail fares will rise by 3.5 per cent from January next year, following the release of July's inflation figures.

Under the formula, average fares in England and Wales are due to go up by July's RPI measure of inflation, plus 1 per cent.

RPI - the Retail Prices Index - was 2.5 per cent last month, according to the Office for National Statistics (ONS).

Labour accused the government of 'ripping off' passengers, but the government defended the rise.

Regulated fares have increased by more than the rate of inflation in most years since 2004.

Such fares include season tickets, 'anytime' single tickets around major cities, and off-peak inter-city return tickets.

But under a 'flex' rule, train companies can raise fares by 2 per cent above the average, as long as the overall average stays at RPI plus 1 per cent.

As a result, some fares could increase by 4.5 per cent next year.