When will inflation come down? What is the current UK rate, why is it so high and 2022 predictions explained

Inflation has been rising steadily for the last nine months, with the Bank of England expecting it to peak at 11%

Inflation in the UK has risen to its highest level in 40 years, reaching 9.4% in June.

Soaring prices are having a devastating impact as the cost of living crisis continues to put the squeeze on households and businesses.

The Office for National Statistics (ONS) blamed high fuel prices and food costs for the steep rise.

ONS Chief economist Grant Fitzner said: “Annual inflation again rose to stand at its highest rate for over 40 years.”

Inflation has been rising steadily for the last nine months, with the Bank of England expecting it to peak 11% by autumn.

Speaking to BBC Breakfast, the government admitted that the current situation is “challenging”, but blamed the war in the Ukraine for “taking a toll here at home.”

The news comes after the government announced a below inflation pay rise for public sector workers, which is expected to cause strike action.

Here’s everything you need to know about why inflation is so high and when it will come down.

What is the current UK inflation rate?

The current inflation rate in the UK is 9.4%.

Inflation has reached the highest rate for 40 years at 9.4% (Pic: Getty Images)

This is the highest rate the UK has seen in 40 years.

ONS Chief economist Grant Fitzner explained: “The increase was driven by rising fuel and food prices, these were only slightly offset by falling second-hand car prices.”

The last time inflation was over 9% was in 1981, when it hit 9.1.

Why is inflation so high?

The rate of inflation began to rise in 2021 after the Covid-19 pandemic.

As countries around the world began to open up again, businesses struggled to meet with the extra demand for goods and services.

With a gap in production, accessing materials was challenging and many businesses were left with shortages.

The February 2022 invasion of Ukraine by Russia only exacerbated the situation, by driving up the price of gas, oil and petrol.

Ukraine is also a key player in the world’s agricultural sector, being one of the largest grain producers.

The lack of grain supply has seen prices for food soar and also caused food shortages.

As a result of this, businesses have had to charge more for their products, which leaves households in the UK feeling the strain.

When will inflation come down?

The Bank of England has predicted that inflation will come down in 2023.

If all goes as expected, the rate of inflation will be close to 2% in two years time.

However, that isn’t helpful to households struggling with inflation now.

Speaking about the impact of inflation, Labour shadow chancellor Rachel Reeves blamed the Conservative government for the struggles households are facing, commenting on the below inflation pay rise proposals.

Reeves said: “Rising inflation may be pushing family finances to the brink, but the low wage spiral facing so many in Britain isn’t new.

“It’s the result of a decade of Tory mismanagement of our economy meaning living standards and real wages have failed to grow.”

What are the inflation predictions for 2022?

The Bank of England has predicted that inflation will keep rising in 2022, peaking at 11%.

The next few months will see households put under more pressure as the cost of living is set to continue to rise.

Chancellor Nadhim Zahawi visits an ASDA supermarket to mark the first Cost of Living Payments being issued (Pic: AFP via Getty Images)

Commenting on inflation, the Chancellor Nadhim Zahawi said: “Countries around the world are battling higher prices and I know how difficult that is for people right here in the UK, so we are working alongside the Bank of England to bear down on inflation.

“We’ve introduced £37bn worth of help for households, including at least £1,200 for 8 million of the most vulnerable families and lifting over 2 million more of the lowest paid out of paying personal tax.”

However, there have been calls for the government to intervene, with Labour’s Annelise Dodds calling for “urgent action.”

Speaking to BBC Breakfast she said: "We need to see immediate action. Government should be taking VAT off energy bills.

"We could take action right now to get people’s bills down."