The Consumer Price Index measure of inflation rose to 2.5 per cent in June, up from 2.1 per cent in May, according to the Office for National Statistics.

And while there’s been some improvement to the top savings rates in recent weeks, inflation is still raising havoc on savers’ cash.

Today, the most savers can earn is 1.72 per cent from UBL UK and that’s if they tie their money up for five years. That’s compared to 1.6 per cent a month ago, data from Moneyfacts shows.

The best rate on offer for people wanting an easy access account is 0.5 per cent from Marcus or ICICI Bank UK.

Jason Hollands, managing director of Bestinvest, said: “Around 30 per cent of household are estimated to have accumulated additional savings during the pandemic as a result of many months of restrictions on socialising and travelling and the reduced costs of working from home.

“But rising inflation now risks eating into those improved finances, gnawing away at the future spending power of cash left languishing in savings accounts at a time of ultra-low interest rates.

“Don’t be fooled by small rises in cash savings rates: real interest rates on cash savings are negative, once inflation is taken into account.”

To add salt to the wound, the Bank of England expects inflation to continue rising over the summer, hitting 3 per cent, before dropping back.

Sarah Coles, personal finance analyst at Hargreaves Lansdown, said: “Higher inflation was the last thing that savers needed. It means we need to hunt down the best possible rate, so our savings work as hard as possible.”

Anyone with cash beyond their emergency savings of three to six months’ worth of essential expenses should consider tying it up to get a better rate, according to Coles.

She said: “Most people think it’s not worth bothering to switch, because rates are so low right now. However, you can make 50 times the interest in the most competitive easy access accounts and you have to ask yourself what the alternative is. If you’re going to sit tight and wait for your bank to offer you more, you could be in for a hell of a wait, because the market expects the Bank of England to keep rates at 0.10 per cent until 2023.”