Rail passengers could be handed a lifeline under plans being examined by ministers to peg next year’s fare rises to a lower measure of inflation.

The Department for Transport (DfT) is weighing up a shift to using the Consumer Price Index (CPI) – rather than the outdated and generally higher Retail Price Index (RPI) – as the benchmark for annual increases, according to people familiar with the talks.

The move – reported by the FT – would mark a significant break with long-standing practice. It comes as Chancellor Rachel Reeves scrambles for ways to ease the cost of living crisis ahead of the Budget, which could also cut to VAT on energy bills and reductions in levies funding green schemes.

Treasury officials are understood to have taken a direct interest in the next set of rail fare rises, typically announced in late December for introduction in March.

Although usually handled by civil servants, senior rail figures say Ms Reeves and her team have been closely involved this time.

The Chancellor has urged departments to find measures that will relieve financial pressure on families and help pull down inflation – giving the Bank of England more room to cut interest rates in the coming months.

Lower inflation forecasts would also improve the public finances. The Office for Budget Responsibility’s projections for interest rates play a major role in calculating future government borrowing costs. If the watchdog expects lower inflation, it potentially gives Ms Reeves more Budget “headroom”.

The switch to CPI would mirror changes already under way elsewhere. The government has opened a consultation on linking payments under the renewables obligation (RO) scheme – a legacy support mechanism for renewable power stations – to CPI rather than RPI.

Britain has been moving away from RPI for years. Although still published by the Office for National Statistics, it is no longer considered an official statistic.

Yet many charges are still tied to it, including rail fares, student loan interest rates and several duties. Because RPI uses a different formula and components, it has historically run around one percentage point higher than CPI.

Rail price hikes are typically set at the rate of inflation plus one percentage point, based on July’s figures. This year, RPI stood at 4.8% while CPI was markedly lower at 3.8% – a gap that could make a sizeable difference for millions of commuters.

“In this world of high inflation expectations, getting the numbers down over six to nine months is really important for the optics and in helping open the door for more Bank of England rate cuts,” said Victoria Clarke, UK chief economist at Santander.

A DfT spokesperson insisted that no decisions had been made on rail fares “and we won’t pre-empt the Budget”.

Officials emphasised that fares and ticketing reform is a core plank of the government’s wider rail nationalisation agenda but said it is too early to predict next year’s rise.

One proposal under consultation would reduce the number of ticket types, potentially saving passengers around £80 million in the first year if introduced from April 2026.

The Bank of England has repeatedly highlighted government-regulated prices in sectors such as energy and water as key contributors to the recent jump in inflation to 3.8% – almost double the target.