The rate of inflation doubled in December as Covid disruptions and the brief window of looser restrictions helped to boost travel, clothing and video game costs.

The Consumer Prices Index (CPI) rose from 0.3pc in November to 0.6pc last month, lifting the living costs gauge off a three-month low, the Office for National Statistics said.

Higher air and sea fares, video game prices and the disruption to normal clothing discounting trends provided the biggest boost to prices. Retailers typically hold sales in December but shops discounted earlier in the year as lockdown sapped demand.

That offset a fall in average fuel costs for motorists compared with the same period a year earlier and the largest drop in food and non-alcoholic drink prices in four years.

The blow to demand from the pandemic sent inflation plunging to its lowest level in four years but economists predicted the rate will head back towards the Bank of England’s 2pc target in 2021.

Prices are set to be boosted by the VAT cut for the hospitality and tourism sectors ending, rising commodity prices and the reopening of the economy amid huge stimulus efforts.

“Together these forces could lift inflation to more than 2pc by the end of the year,” said Thomas Pugh, UK economist at Capital Economics.

“Further ahead, inflation may creep higher if the authorities keep monetary and fiscal policy loose after all the spare capacity in the economy has been absorbed.”

Allan Monks, UK economist at JPMorgan, predicted that prices will climb "sharply into the spring, led by rising energy inflation and the expiry of the current VAT cut from April. It now looks likely that Ofgem will set its biannual energy price cap some 11pc higher from April."

While price rises are set to pick up, more stimulus from the Bank of England to lift inflation is expected as the third lockdown hits demand.

The Monetary Policy Committee is mulling whether it can take interest rates below zero to aid the economy after relying on its huge bond-buying programme during the pandemic.

“With consumer price inflation substantially below its 2pc target in December, the Bank of England will feel that ample scope remains for it to take further stimulus action to support the UK economy - if deemed necessary - over the coming months,” said Howard Archer, EY Item Club economist.

He said the latest national lockdown “magnifies the chances that the Bank of England will take further near-term stimulus action, including the possible introduction of negative interest rates”.