The governor of the Bank of England has warned it is “much too early” to say that inflation has been beaten, despite figures last week which showed the Prime Minister’s target to halve inflation had been reached.

Andrew Bailey, who sits on the body which decides interest rates, said that inflation is still “too high”.

Last week’s inflation figures showed a group of goods and services increased in price by around 4.6% in the 12 months to the end of October.

The reading, called Consumer Prices Index (CPI) inflation, was the lowest it had been for two years.

After the figures came out, Prime Minister Rishi Sunak said he had halved inflation, one of the five key priorities he set out at the start of the year. Economists had already expected inflation to more than halve when Mr Sunak made the pledge.

While Mr Sunak wanted to halve inflation from close to 11% at the start of this year, the actual target that the Bank works towards is 2%.

In a speech, Mr Bailey said that it was both too soon to say that inflation had been beaten and too early to start talking about cutting interest rates.

The Bank has hiked rates over the last two years in an attempt to help get inflation under control.

“While the inflation data for October released last week were welcome news, it is much too early to declare victory,” he said.

“Inflation remains too high and we need to make sure we get it all the way down to the 2% target.”

Mr Bailey said the Bank’s interest rates are currently “restrictive”, meaning that they are helping to bring down inflation.

“If we maintain this stance for long enough, we will squeeze inflation out of the system. That is what we will do,” he said.

He said this could mean hiking interest rates again, should inflation prove more persistent. He added that interest rates would need to be restrictive for “quite some time yet”.

“Let me be very clear: it is far too early to be thinking about rate cuts,” Mr Bailey said.