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Chancellor Reeves has revealed she is preparing "targeted action to address cost of living challenges" in the upcoming financial statement.

In comments to the BBC, she noted that lowering price rises is a collective task of both the administration and the Bank of England.

The UK's inflation rate is forecast to be the most elevated among the G7 advanced economies this year and next.

Possible Energy Cost Interventions

Sources suggest the administration could intervene to lower energy bills, such as by cutting the current 5% rate of VAT charged on energy supplies.

Another approach is to lower some of the government charges currently added to household expenses.

Budgetary Limitations and Expert Predictions

The government will obtain the latest report from the official forecaster, the Office for Budget Responsibility, on Monday, which will show how much scope there is for these measures.

The view from most economists is that the Chancellor will have to introduce tax increases or spending cuts in order to fulfill her voluntary fiscal targets.

Earlier on Thursday, calculations indicated there was a £22bn shortfall for the chancellor to resolve, which is at the more modest range of projections.

"It is a shared job between the Bank of England and the government to continue tackling some of the causes of inflation," Reeves told reporters in Washington, at the annual meetings of the International Monetary Fund and global financial institution.

Revenue Pledges and International Concerns

While much of the attention has been on probable tax increases, the Treasury chief said the latest data from the OBR had not changed her vow to manifesto promises not to increase tax levels on income tax, sales tax or social security contributions.

She blamed an "unpredictable global environment" with increasing international and trade tensions for the Budget revenue measures, probably to be focused on those "wealthiest."

International Trade Tensions

Addressing concerns about the United Kingdom's commercial links with the Asian nation she said: "Our national security invariably come first."

Recent statement by China to tighten trade restrictions on critical minerals and other materials that are essential for advanced tech manufacturing led American leader Donald Trump to propose an further 100% tariff on imports from the Asian country, increasing the risk of an full-scale commercial conflict between the two global powers.

The American finance chief labeled the Chinese action "commercial pressure" and "a global supply chain control attempt."

Asked about accepting the US offer to join its dispute with the Asian nation, Reeves said she was "very concerned" by Chinese actions and called on the Beijing authorities "not to put up barriers and limit trade."

She said the move was "bad for the global economy and generates further obstacles."

"I believe there are areas where we must confront China, but there are also significant opportunities to trade with Chinese markets, including financial services and other areas of the economic system. We've got to achieve that equilibrium appropriate."

The chancellor also affirmed she was collaborating with international partners "regarding our own critical minerals plan, so that we are more independent."

Health Service Drug Costs and Funding

The Chancellor also acknowledged that the cost the National Health Service spends on drugs could increase as a result of ongoing negotiations with the Trump administration and its pharmaceutical firms, in return for lower tariffs and capital.

Some of the world's largest drug companies have said lately that they are either delaying or scrapping operations in the UK, with some attributing the low prices they are obtaining.

Recently, the government science advisor said the cost the NHS spends on medicines would need to go up to stop companies and pharmaceutical investment leaving the United Kingdom.

Reeves informed the BBC: "We have seen because of the pricing regime, that clinical trials, innovative medicines have not been available in the UK in the manner that they are in other EU nations."

"The objective is to guarantee that people receiving treatment from the NHS are can receive the best critical medicines in the globe. And so we are examining these issues, and... seeking to secure increased investment into the UK."