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Treasury head Rachel Reeves has revealed she is planning "specific action to deal with cost of living challenges" in the forthcoming Budget.

During an interview with media outlets, she noted that curbing price rises is a shared responsibility of both the government and the Bank of England.

The UK's inflation rate is forecast to be the highest among the Group of Seven advanced economies this calendar year and the following year.

Potential Utility Cost Measures

It is understood the administration could take action to bring down utility costs, such as by reducing the current 5% level of value-added tax charged on energy.

A further possibility is to lower some of the government charges currently added to bills.

Fiscal Constraints and Expert Expectations

The administration will receive the latest report from the official forecaster, the OBR, on the start of the week, which will clarify how much space there is for such measures.

The view from most economists is that the Chancellor will have to declare higher taxes or budget cuts in order to adhere to her declared debt limits.

Previously on the same day, calculations indicated there was a £22 billion gap for the chancellor to address, which is at the lower end of forecasts.

"There's a collective task between the Bank of England and the administration to continue tackling some of the drivers of inflation," the Chancellor informed the BBC in the US capital, at the annual meetings of the International Monetary Fund and World Bank.

Revenue Pledges and Global Issues

While much of the attention has been on expected tax increases, the chancellor said the most recent information from the OBR had not changed her vow to manifesto promises not to increase rates on earnings tax, VAT or social security contributions.

She blamed an "uncertain global environment" with growing international and trade concerns for the Budget tax moves, probably to be targeted on those "most able to pay."

Global Economic Tensions

Commenting on concerns about the UK's economic relations with the Asian nation she said: "Our security interests always are paramount."

Last week's declaration by China to strengthen trade restrictions on rare earths and other materials that are essential for high-technology production led US President the US President to threaten an additional 100% import tax on imports from China, raising the prospect of an full-scale trade war between the two economic giants.

The US Treasury Secretary labeled the Chinese move "commercial pressure" and "a global supply chain control attempt."

Questioned on considering the US offer to participate in its dispute with the Asian nation, the Chancellor said she was "extremely troubled" by Chinese measures and called on the Beijing authorities "to avoid restrictions and limit trade."

She said the decision was "bad for the world economy and generates additional obstacles."

"I believe there are sectors where we must address Chinese policies, but there are also valuable opportunities to trade with Chinese markets, including banking sector and other sectors of the economy. We've got to get that equilibrium correct."

The Treasury chief also affirmed she was collaborating with G7 counterparts "regarding our own critical minerals plan, so that we are more independent."

NHS Medicine Pricing and Investment

Reeves also acknowledged that the price the National Health Service spends on pharmaceuticals could rise as a consequence of ongoing discussions with the Trump administration and its drugs companies, in exchange for reduced taxes and capital.

A number of the biggest global drug companies have said recently that they are either pausing or abandoning investments in the United Kingdom, with some blaming the modest returns they are getting.

Recently, the government science advisor said the price the health service spends on medicines would need to rise to halt firms and drug research funding leaving the UK.

Reeves stated to media: "It has been observed because of the pricing regime, that drug testing, recent pharmaceuticals have not been offered in the United Kingdom in the way that they are in other continental states."

"The objective is to guarantee that people getting care from the National Health Service are can access the best critical treatments in the world. And so we are reviewing all of that, and... aiming to obtain more investment into the UK."