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Treasury head Rachel Reeves has announced she is planning "focused steps to tackle cost of living challenges" in the forthcoming Budget.

Speaking to the BBC, she noted that reducing price rises is a collective task of both the government and the Bank of England.

The United Kingdom's inflation rate is projected to be the highest among the G7 industrialized countries this calendar year and the following year.

Potential Energy Bill Interventions

It is understood the administration could intervene to bring down energy bills, for example by reducing the present 5% level of value-added tax applied on energy.

An additional option is to cut some of the policy costs currently added to household expenses.

Fiscal Constraints and Expert Expectations

The government will obtain the next report from the independent fiscal watchdog, the Office for Budget Responsibility, on Monday, which will clarify how much room there is for such measures.

The consensus from most economists is that Reeves will have to announce higher taxes or budget cuts in order to meet her declared fiscal targets.

Previously on Thursday, estimates indicated there was a twenty-two billion pound gap for the chancellor to resolve, which is at the more modest range of expectations.

"There's a joint task between the central bank and the government to continue tackling some of the drivers of inflation," Reeves told reporters in Washington, at the yearly gatherings of the IMF and global financial institution.

Revenue Pledges and Global Concerns

While much of the attention has been on expected tax increases, the Treasury chief said the latest figures from the fiscal watchdog had not changed her vow to campaign commitments not to raise tax levels on income tax, sales tax or social security contributions.

She blamed an "uncertain world" with growing geopolitical and trade tensions for the fiscal tax moves, probably to be focused on those "wealthiest."

Global Trade Disputes

Commenting on concerns about the United Kingdom's commercial links with China she said: "The UK's national security always are paramount."

Last week's declaration by Chinese authorities to tighten trade restrictions on critical minerals and other resources that are key for advanced tech manufacturing led US President Donald Trump to propose an extra 100% import tax on imports from the Asian country, raising the prospect of an full-scale trade war between the two global powers.

The US Treasury Secretary labeled the Chinese action "economic coercion" and "a international production power grab."

Questioned on considering the US offer to join its conflict with China, Reeves said she was "deeply worried" by Chinese measures and encouraged the Beijing authorities "to avoid restrictions and limit trade."

She said the move was "damaging for the world economy and causes additional headwinds."

"In my view there are fields where we need to confront Chinese policies, but there are also significant opportunities to export to Chinese markets, including financial services and other sectors of the economic system. We've got to maintain that equilibrium right."

The chancellor also stated she was working with international partners "on our own essential resources approach, so that we are reduced dependence."

Health Service Medicine Costs and Funding

The Chancellor also recognized that the price the NHS spends on medicines could increase as a consequence of current negotiations with the US government and its drugs companies, in exchange for lower tariffs and investment.

A number of the world's largest drug companies have said in recent statements that they are either halting or scrapping operations in the UK, with some blaming the modest returns they are getting.

Last month, the Science Minister said the price the NHS pays for medicines would must increase to prevent firms and pharmaceutical investment departing from the UK.

Reeves informed the BBC: "We have seen as a result of the cost structure, that drug testing, new drugs have not been available in the United Kingdom in the manner that they are in other European countries."

"Our aim is to ensure that patients getting care from the National Health Service are can access the best essential drugs in the world. And so we are examining this situation, and... seeking to obtain more investment into Britain."