Of the 659 accounts available, just 140 pay 1.2% or more, data firm Moneyfacts found.

Statistics released today show consumer price inflation rose to 1.2% during November, the highest rate in nearly two years.

Inflation dipped in October, but experts are calling the surprise fall a “blip”.

“Today’s figures mark a resumption of an upward trend,” said Ben Brettell, senior economist at Hargreaves Lansdown.

“The Bank of England expects inflation to climb throughout next year, hitting 2.7%, and remaining above the 2% target until 2020. Other forecasters see a much sharper rise to as much as 4%.”

Soaring inflation is bad news for savers as it erodes the value of their cash in real terms.

It will add to the pain of struggling savers who have faced relentless rate cuts this year.

According to Moneyfacts, rate reductions have now outweighed rate rises for 14 consecutive months and the number of savings accounts that pay 1% or more has halved over the last 12 months.

One year ago 67% of accounts paid 1% or more, compared to only 34% today, the firm said.

“Inflation is expected to rise well beyond the government’s 2% target next year, which will have a devastating effect on savings interest due to the low rates on offer,” said Rachel Springall, finance expert at Moneyfacts.

“Apart from a handful of challenger banks, the savings market is starved of its competition, so anyone who relies on savings interest will be facing some tough times ahead.”

Research published yesterday by MoneySupermarket found foreign and challenger banks are the best place for savers to house their cash.

The market leading one-year fixed rate product currently comes from app-based Atom Bank and Swedish-owned IKANO, both at 1.40%.

The best three-year fixed deal is 1.65% from Hanley Economic Building Society, with IKANO Bank offering a similar rate of 1.63%.