The Consumer Price Index showed that inflation rose to 1.6% in December last year, from 1.2% in November, the Office for National Statistics has said.
It is the highest rate of inflation since July 2014, and outperformed economists' median forecast of 1.4%.
The rise has been blamed partly on the rise of air fares and food prices.
ONS head of inflation Mike Prestwood said: "This is the highest CPI has been for over two years, though the annual rate remains below the Bank of England's target and low by historical standards.
"Rising air fares and food prices, along with petrol prices falling less than last December, all helped to push up the rate of inflation.
"Rising raw material costs also continued to push up the prices of goods leaving factories."
It comes a day after Bank of England governor Mark Carney warned the depreciation of sterling following a vote for Brexit may have a delayed impact on wages and consumer spending.
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The rate of inflation remained steady in August as rising food prices and air fares were offset by a slip in the cost of clothing, wine and hotels.
The Office for National Statistics has announced the rate of Consumer Price Index inflation remained at July's level of 0.6% in August.
The ONS also recalculated a dip in the rate of the rise in house prices through 2016 so far and noted an increase in the average cost of house prices in July.
The ONS said there was "little sign" of the post-Brexit plunge in the value of the pound being passed through to consumer prices.
However, the Producer Prices Index was impacted by the sterling slump, with input prices rising 7.6% in the year to August and imported material prices climbing by 9.3% over the period.
July's inflation figures - the first guide to how the post-Brexit fall in the pound's value is affecting the cost of living in Britain - were up on the previous month.
There has been an insignificant rise in consumer price inflation, but in order to get a real sense of where prices might be heading, focus should be directed at the Producer Price Index, which tracks what manufacturers pay for materials.
ITV News Economics Editor Noreena Hertz explains: