How long is UK inflation likely to remain high, and what can the government do to fight back?
The Bank of England expects the UK's energy price cap to rise again in October, which will push inflation up to 10% this autumn. Despite this, it says that the "current high rates of inflation are not likely to last".Not all economists are so sure. Historically, when inflation has risen above 9% it has taken years, not months, to recover.
To combat the effects of inflation, companies are offering higher wages to workers. But to pay for this, they often have to raise the prices of their own products and services, which fuels further inflation."Inflation is likely to remain a problem in 2023 because its root causes are unlikely to change in the near future" says Prof Crescenzi.By raising interest rates, the Bank of England can make borrowing more expensive - encouraging people to save instead of spend.
Labour say a windfall tax would raise £1.2bn but the government argues that such a tax could discourage crucial investments that would eventually bring down energy costs and so make the UK less sensitive to global oil and gas prices.
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