Official inflation figures released by the Office for National Statistics (ONS) revealed that the Consumer Price Index, the government’s preferred measure of inflation, was 2.9 per cent in December.
The figure was up from the 1.9 per cent reported in the previous month.
According to the ONS, the one per cent increase is the largest ever rise in the annual rate between two months.
However, Liberal Democrat treasury spokesman Vince Cable described the figure as a "temporary spike".
"With inflation expected to fall quickly, it seems unlikely that the Bank of England would want to raise interest rates in the near future," he explained.
"Any recovery in the economy is still very fragile, it would be all too easy to destroy it by putting the brakes on too soon."
He added: "With the world economy improving at a much quicker rate than the UK, there is a danger that high food and energy prices could hit our economy before it has had chance to recover."
Rising energy prices could be disastrous for elderly people who dedicate a larger proportion of their income on heating.
Such rises could see many people turn to equity release schemes in order to provide additional funding for the retirement.
