diff --git a/pallets/inflation/src/lib.rs b/pallets/inflation/src/lib.rs
index e49af7e0f4..6b9bf3a3e4 100644
--- a/pallets/inflation/src/lib.rs
+++ b/pallets/inflation/src/lib.rs
@@ -70,8 +70,8 @@ pub mod pallet {
 			+ Mutate<Self::AccountId>;
 		type TreasuryAccountId: Get<Self::AccountId>;
 
-		// The block number provider
-		type BlockNumberProvider: BlockNumberProvider<BlockNumber = BlockNumberFor<Self>>;
+		// The block number provider, which should be callable from `on_initialize` hook.
+		type OnInitializeBlockNumberProvider: BlockNumberProvider<BlockNumber = BlockNumberFor<Self>>;
 
 		/// Number of blocks that pass between treasury balance updates due to inflation
 		#[pallet::constant]
@@ -118,7 +118,7 @@ pub mod pallet {
 			};
 
 			let block_interval: u32 = T::InflationBlockInterval::get().try_into().unwrap_or(0);
-			let current_relay_block = T::BlockNumberProvider::current_block_number();
+			let current_relay_block = T::OnInitializeBlockNumberProvider::current_block_number();
 			let next_inflation: BlockNumberFor<T> = <NextInflationBlock<T>>::get();
 			add_weight(1, 0, Weight::from_parts(5_000_000, 0));
 
diff --git a/runtime/common/config/pallets/mod.rs b/runtime/common/config/pallets/mod.rs
index ee0694582c..5df782afdb 100644
--- a/runtime/common/config/pallets/mod.rs
+++ b/runtime/common/config/pallets/mod.rs
@@ -21,7 +21,7 @@ use frame_support::{
 	traits::{ConstU32, ConstU64, Currency},
 };
 use sp_arithmetic::Perbill;
-use sp_runtime::traits::AccountIdConversion;
+use sp_runtime::traits::{BlockNumberProvider, AccountIdConversion};
 use up_common::{
 	constants::*,
 	types::{AccountId, Balance, BlockNumber},
@@ -105,12 +105,33 @@ parameter_types! {
 	pub const InflationBlockInterval: BlockNumber = 100; // every time per how many blocks inflation is applied
 }
 
+/// Pallet-inflation needs block number in on_initialize, where there is no `validation_data` exists yet
+pub struct OnInitializeBlockNumberProvider;
+impl BlockNumberProvider for OnInitializeBlockNumberProvider {
+	type BlockNumber = BlockNumber;
+
+	fn current_block_number() -> Self::BlockNumber {
+		use parity_scale_codec::Decode;
+		use hex_literal::hex;
+		use sp_io::storage;
+		// TODO: Replace with the following code after https://github.com/paritytech/polkadot-sdk/commit/3ea497b5a0fdda252f9c5a3c257cfaf8685f02fd lands
+		// <cumulus_pallet_parachain_system::Pallet<Runtime>>::last_relay_block_number()
+
+		// ParachainSystem.LastRelayChainBlockNumber
+		let Some(encoded) = storage::get(&hex!("45323df7cc47150b3930e2666b0aa313a2bca190d36bd834cc73a38fc213ecbd")) else {
+			// First parachain block
+			return Default::default()
+		};
+		BlockNumber::decode(&mut encoded.as_ref()).expect("typeof(RelayBlockNumber) == typeof(BlockNumber) == u32; qed")
+	}
+}
+
 /// Used for the pallet inflation
 impl pallet_inflation::Config for Runtime {
 	type Currency = Balances;
 	type TreasuryAccountId = TreasuryAccountId;
 	type InflationBlockInterval = InflationBlockInterval;
-	type BlockNumberProvider = RelayChainBlockNumberProvider<Runtime>;
+	type OnInitializeBlockNumberProvider = OnInitializeBlockNumberProvider;
 }
 
 impl pallet_unique::Config for Runtime {