Rishi Sunak has said he is not “complacent” about how easy it will be to see inflation drop further.
On Wednesday the latest figures showed inflation dropped to to 6.8% in the year to July from 7.9% in June.
The prime minister has promised to half inflation from its peak of 10.7% at the start of the year.
Speaking to ITV News this afternoon, Sunak said: “I’m not complacent about this at all.
“When I set out that target, people said - that’s easy, he’s not ambitious enough - I don’t think it was, I think it’s an ambitious target.
“It might make people feel better in the short term to borrow lots of money to do lots of things but it would also mean that prices stay higher for longer and mortgage rates stay higher for longer and I’m not going to do that.”
Labour’s deputy leader Angela Rayner has said the drop will “relief” to many but the Conservatives have put people through “hell and back”.
“We’ve seen families see their bills going up significantly – over £300 a month – and it has been really difficult for people over the last couple of years, and we’ve had 13 years of economic chaos by the Conservatives,” she told BBC Radio 4′s Today programme.
“People have been put through hell and back and they’re still going to be facing this cost-of-living crisis for some time to come.”
She added: “The frustration for us in Labour is that we didn’t have to be here.
“The Tories crashed the economy, they haven’t provided us with an economy that has been growing, we’ve had a decade of low growth, low pay and high taxes.”
An analysis by Labour showed monthly bills for the average household have risen by £350 since 2021/22.
The party said Office for National Statistics (ONS) data showed weekly spending on goods and services, such as food, transport and fuel bills, is forecast to have risen from £529 in 2021/22 to £611 today.