Commuters face more misery as regulated rail fares across England, Scotland and Wales will rise by 1.9% in 2017. The hike has prompted protests from the UK's trade unions, with the Trades Union Congress (TUC) leading the "Action for Rail" campaign.
Analysis from the TUC, released before the government's announcement, claimed rail fares have risen by 25% in the last six years, while average weekly earnings have only grown by 12%.
"Rail passengers are paying more and getting even less. Fares go up while trains remain overcrowded, stations are unstaffed, and rail companies cut the guards who ensure journeys run smoothly and safely," said Frances O'Grady, the general secretary of the TUC.
"Enough is enough. It's time for rail services to be publicly owned, saving money for passengers and taxpayers alike. Instead of increasing fares and cutting staff, we should be building an accessible, reliable train service that Britain can be proud of."
Labour leader Jeremy Corbyn, who joined RMT, TSSA and Aslef activists at a London Bridge protest on Tuesday 16 August, recommitted to re-nationalising Britain's railways and launched his so-called "Transport Tuesday" campaign, which his camp claim could save rail passengers 10% off their fares.
"Public ownership of our railways is needed now to fix the transport nightmare we are currently faced with, and we know there is overwhelming support among the British public for a people's railway," Corbyn said.
"It is only by bringing the railways back under public ownership as the contracts expire, that will fix the rail crisis and I'm pleased that even some Tory politicians are now joining us in calling for Southern rail to immediately be brought under public ownership.
"Today I am also pledging that under my leadership, the next Labour government, will enable all local authorities to have franchising powers over their bus networks and enable all local authorities to establish municipal bus companies.
"Together these plans for the bus and rail network will help us rebuild and transform Britain's transport system, so that no-one and no community is left behind."
Owen Smith, Corbyn's sole Labour leadership challenger, has also promised to re-nationalise the railways as part of his £200bn 'British New Deal'.
The news comes as the Office for National Statistics (ONS) said Consumer Price Index (CPI) inflation rose by 0.6% in July, following the UK's vote to leave the EU on 23 June.
The official figures showed inflation lifted from 0.5% in June, and was also edged up by rises in alcoholic drinks and accommodation. Economists had expected inflation to remain unchanged in July from June.