HS2 will cost up to £102.7bn and trains will be slower than first planned

An important development from the financial markets: HS2 will cost up to £102. 7bn and trains will be slower than first plannedJust now Share Save Add as preferred on GoogleKaty Austin ,Transport correspondentandRachel Clun ,Business reporterPA MediaHS2 could now cost up to £102. 7bn, the transport secretary has announced.

Trains will not start running until between 2036 and 2039, up to six years later than the most recent official target of 2033, Heidi Alexander told the House of Commons. To save money, the trains' top speed - originally planned to be 360km/h (224mph) - will be reduced to 320km/h. The new cost range, delayed start and lower train speed are being announced as a "reset" of the delayed, over-budget and vastly scaled-back project is carried out.

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HS2 was doomed to be a mess, say insiders - because of a 'problem in this country'Heidi Alexander has published the Lovegrove report into the project, which she said details the "litany of failure" Labour inherited from the previous government. "Instead of signalling the country's ambition, HS2 became a signal of the country's decline," she told MPs. Alexander said the rail project was now expected to cost between £87.

In 2013, the project was forecast to cost £50. 1bn in 2011 prices, which is the equivalent of about £75bn in today's money, when accounting for inflation. However, that forecast was made when the line was still due to go to Manchester and Leeds.

The current project is set to run from London to Birmingham.

Financial markets are tracking the development closely as investors assess the likely impact.