Today’s inflation figures show the economy is “not out of the woods yet”, Labour’s shadow Treasury minister Darren Jones has said.

The MP for Bristol North West said inflation was heading “in the right direction” but there was more work to be done.

He told Sky News: “Core inflation is still around 3.6 to 3.9 per cent, which is hotter than the markets were expecting it to be. This is not out of the woods yet. It is in the right direction but there is still much more to be done.”

Mr Jones pointed to Labour’s “securonomics” agenda, which includes measures to build “homegrown, secure, renewable energy”.

The shadow minister said: “The one reason that the headline rate of inflation has come down closer to 2 per cent today even though the cost of other things are remaining a bit too high is because of the energy bills.

“The problem there is if something happens in the world and gas prices rocket again, we are going to be back into that inflationary environment with very high bills.”

Jeremy Hunt declined to be drawn on when he thought the Bank of England would cut interest rates.

The chancellor said the central bank would cut rates when it was “confident that it is sustainably at its target”.

Analysts said the Bank was likely to be more cautious on a potential cut in June because inflation fell by less than expected.

Labour will be “much more ambitious” on the economy than the government if it wins the election, Rachel Reeves has said.

The shadow chancellor said her party would bring “stability back to our economy” and invest more in renewables.

She said Labour would invest more in  “home-grown renewables so we’re less reliant on Putin and dictators around the world for our basic energy needs and can bring energy bills down for families and pensioners”.

Jeremy Hunt has acknowledged that people were likely to be feeling worse off than they did a few years ago.

The chancellor said “two massive shocks” – the Covid pandemic and Russia’s war in Ukraine – were to blame for the drop in living standards.

Speaking to ITV’s Good Morning Britain programme, the chancellor said: “Do people feel better off now than a few years ago? No, because we have had something that you and I have never had in our lifetimes.

“We have had two massive economic shocks in quick succession so no, they don’t feel better than they felt a few years ago.

“The numbers show very clearly that since 2010 over a longer period of time living standards have improved, we have got four million more jobs, we have attracted more investment than anywhere in the world apart from China and the United States.

“The reason I am saying that is because this is an election year, people are going to make a choice about the future.

“When it comes to the important things that make a difference, the difficult decisions on having a flexible labour market, on getting taxes down so that we attract investment from overseas, a Conservative government will continue to take those difficult decisions.”

Watch some of the interview below:

Jeremy Hunt said it was “nothing to do with me” when asked if he personally felt wealthier following the cost-of-living crisis.

Asked by BBC Radio 4’s Today programme if he felt wealthier, the chancellor said: “It is nothing to do with me. It is to do with my responsibilities as chancellor.

“What I know when I became chancellor is we had the Office for Budget Responsibility saying we were going to have the biggest fall in living standards ever.

“We had the Bank of England saying that we were going to have the deepest, the longest recession for a hundred years.”

He pointed to cost-of-living support the government had offered, adding: “The result of those difficult decisions, and they were difficult because in the end we had to put up taxes for those decisions, but the result is living standards have gone up since Rishi Sunak became prime minister.”

In a testy exchange, Mr Hunt could earlier be heard to insist “me too” when host Emma Barnett said she was interested in people’s household finances.

Chancellor Jeremy Hunt has been dealt a blow after official figures revealed borrowing for April overshot forecasts, hitting £20.5 billion, in the fourth-highest April since records began in 1993.

The Office for National Statistics (ONS) estimated that public sector net borrowing was £1.5 billion more than in 2023, partly pushed up by falling national insurance contributions.

Many people are still facing lower living standards, a think tank has said as it warned that the worst of the cost of living crisis “is not over”.

Ben Harrison, director of the Work Foundation at Lancaster University, said:  “Workers across the country might be quietly relieved that their bills and shopping are rising at the lowest level since 2021.

“But even at 2.3 per cent, inflation remains above the Bank of England’s target and many people will be facing lower living standards for some time to come.

“The truth is the worst cost of living crisis for more than 40 years is not yet over – most workers continue to face energy, food and housing costs that are much higher than three years ago.

“The sting in the tail is interest rates remain at a 16-year high of 5.25 per cent. And while there is no guarantee the Bank of England will cut interest rates soon, low paid and insecure workers are particularly exposed to record private rent increases and higher mortgage payments.”

A cut to interest rates in June is “unlikely” after inflation fell less than expected, the Institute of Chartered Accountants in England and Wales has said.

Suren Thiru, ICAEW economics director, said:  “This underwhelming drop in inflation suggests that the UK is rather stumbling back towards the Bank of England’s 2 per cent target, as lower energy bills had a smaller than expected impact on April’s headline rate.

“Concern over hotter than expected headline inflation is exacerbated by disappointing declines in core and services inflation, which suggest that the problem of underlying price pressures embedded in the wider economy have yet to be solved.

“The headline rate is set to drop markedly over the summer, once the expected decline in Ofgem’s energy price cap cuts people’s energy bills from July.

“Lingering concerns over underlying inflationary pressures mean a June rate cut is unlikely. However, these figures may convince more rate setters to vote to ease policy, providing a signal that a summer rate cut is still possible.”

The Bank of England may want to see a further drop in service inflation before it cuts interest rates, a management consultancy has said.

Matthew Chapman, associate partner at McKinsey & Company, said:  “Service inflation remains high. And there may need to be further downward movements in service inflation, real wage growth and the labour market before the narrative on monetary policy can start to change.

“While sharp drops in energy prices and easing food costs have helped push the CPI reading to a three-year low, prices are still substantially higher than they once were. And households are likely to continue adjusting their budgets as the cost of some everyday staples continues to rise at more than double the current rate of inflation. For example, breakfast cereals are up 7.4 per cent and vegetables like potatoes are up 7.9 per cent with the cost of crisps also rising 7.7 per cent.

“A return to the stable dynamics that prevailed before the Covid-19 pandemic still seems unlikely. Inflation is likely to still persist, growth sluggish and high interest rates may continue to create downward pressure on margins. To protect balance sheets, companies will need to remain vigilant and create opportunities to proactively react to cost and demand changes.”

UK inflation has fallen by lower than expected, despite falling gas and electricity prices, dashing hopes that the Bank of England will lower interest rates at its next meeting in June.