Rail season tickets for morning commuters could be slashed next year due to low levels of inflation.

Regulated train fares, including season tickets for commuters, could fall in January after inflation remained at a near record low.

Train companies are only allowed to increase regulated fares by one per cent above the same level as the Retail Prices Index (RPI).

The RPI for July was announced this week as minus 1.4 per cent, meaning commuters could be in line for a 0.4 per cent reduction in regulated fares in January.

The Government this week said it hoped to see the first fall in train fares “for a generation”.

However, London Midland, the train company that runs services out of Watford Junction, has said it will “review” regulated fares before handing passengers a price drop.

A London Midland spokesman told the Watford Observer: "We will complete our review of regulated fares in the autumn and will take account of all of the economic factors along with the advice from the Department for Transport before arriving at our decision."

The capped fares include weekly, monthly and season tickets, as well as long-distance off-peak fares.

Those not regulated include most leisure fares, cheap day returns and advance tickets.

Commuter groups have already warned it will be those passengers who could suffer in the long run, however.

They say train companies could attempt to recoup lost earnings by increasing unregulated fares and increasing parking charges at stations.

Gerry Doherty, head of the TSSA rail union, said: "We expect a wave of companies now to try and make the passengers pay for January's fares cut by jacking up the unregulated off-peak fares in September."