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Chancellor Reeves has revealed she is preparing "focused action to tackle cost of living issues" in the forthcoming financial statement.

During an interview with the BBC, she stated that curbing inflation is a joint duty of both the government and the central bank.

The UK's inflation rate is expected to be the most elevated among the Group of Seven advanced economies this year and next.

Possible Energy Cost Interventions

Reports indicate the government could intervene to lower utility costs, for instance by cutting the present 5% level of value-added tax charged on energy supplies.

A further possibility is to cut some of the policy costs currently included in household expenses.

Fiscal Constraints and Expert Expectations

The government will obtain the next report from the official forecaster, the Office for Budget Responsibility, on the start of the week, which will clarify how much room there is for such actions.

The consensus from most analysts is that Reeves will have to introduce tax increases or spending cuts in order to adhere to her self-imposed borrowing rules.

Previously on Thursday, estimates indicated there was a £22 billion gap for the Treasury chief to fill, which is at the lower end of projections.

"There's a joint job between the central bank and the government to bear down further on some of the drivers of inflation," the Chancellor informed the BBC in Washington, at the conferences of the IMF and global financial institution.

Tax Pledges and International Concerns

While a great deal of the focus has been on probable tax rises, the Treasury chief said the latest information from the fiscal watchdog had not changed her pledge to election pledges not to raise tax levels on income tax, sales tax or National Insurance.

She blamed an "unpredictable world" with increasing international and commercial tensions for the Budget revenue measures, probably to be targeted on those "with the broadest shoulders."

Global Economic Disputes

Addressing concerns about the UK's economic relations with China she said: "Our security interests invariably come first."

Recent announcement by Chinese authorities to tighten trade restrictions on rare earths and other resources that are crucial for advanced tech manufacturing led US President Donald Trump to propose an further 100% tariff on imports from the Asian country, raising the possibility of an full-scale commercial conflict between the two global powers.

The US Treasury Secretary called China's move "commercial pressure" and "a international production control attempt."

Inquired about considering the American proposal to join its conflict with the Asian nation, Reeves said she was "very concerned" by China's measures and called on the Chinese government "not to put up barriers and limit trade."

She said the action was "harmful for the global economy and generates further headwinds."

"In my view there are sectors where we should address Chinese policies, but there are also important opportunities to trade with China's economy, including financial services and other areas of the economic system. We've got to achieve that equilibrium correct."

The chancellor also stated she was collaborating with international partners "regarding our own essential resources approach, so that we are more independent."

NHS Drug Pricing and Funding

The Chancellor also admitted that the price the National Health Service spends on drugs could go up as a consequence of ongoing discussions with the US government and its drugs companies, in return for reduced taxes and capital.

A number of the world's largest pharmaceutical manufacturers have said in recent statements that they are either delaying or scrapping projects in the United Kingdom, with some blaming the modest returns they are receiving.

Last month, the Science Minister said the price the NHS pays for drugs would must rise to stop businesses and pharmaceutical investment leaving the United Kingdom.

Reeves told the BBC: "We have seen because of the cost structure, that drug testing, innovative medicines have not been provided in the UK in the way that they are in other continental states."

"We want to guarantee that individuals receiving care from the NHS are able to receive the top essential drugs in the world. And so we are examining these issues, and... seeking to attract increased funding into Britain."