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Chancellor Rachel Reeves has announced she is planning "targeted action to deal with cost of living pressures" in the upcoming financial statement.

During an interview with the BBC, she noted that curbing price rises is a shared duty of both the government and the central bank.

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

Potential Energy Bill Measures

It is understood the government could intervene to reduce energy bills, for example by reducing the present 5% level of VAT applied on energy.

Another approach is to lower some of the policy costs presently added to household expenses.

Fiscal Constraints and Expert Expectations

The government will receive the latest report from the official forecaster, the Office for Budget Responsibility, on Monday, which will reveal how much room there is for these actions.

The view from most analysts is that the Chancellor will have to announce higher taxes or spending cuts in order to fulfill her declared fiscal targets.

Previously on the same day, estimates showed there was a twenty-two billion pound gap for the chancellor to address, which is at the lower end of forecasts.

"There's a shared task between the central bank and the government to continue tackling some of the sources of inflation," Reeves told the BBC in Washington, at the conferences of the International Monetary Fund and global financial institution.

Revenue Pledges and Global Concerns

While a great deal of the focus has been on likely tax increases, the Treasury chief said the latest figures from the OBR had not altered her vow to campaign commitments not to increase tax levels on earnings tax, VAT or social security contributions.

She attributed an "unpredictable global environment" with rising geopolitical and commercial concerns for the Budget revenue measures, probably to be focused on those "with the broadest shoulders."

International Trade Disputes

Commenting on worries about the United Kingdom's commercial links with China she said: "The UK's security interests invariably are paramount."

Last week's announcement by China to tighten export controls on rare earths and other materials that are crucial for high-technology manufacturing led US President Donald Trump to threaten an extra 100% import tax on goods from China, increasing the prospect of an all-out trade war between the two largest economies.

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

Inquired about considering the American proposal to join its battle with China, Reeves said she was "very concerned" by Chinese measures and called on the Beijing authorities "to avoid restrictions and limit trade."

She said the move was "harmful for the world economy and creates additional challenges."

"I believe there are areas where we should address China, but there are also important prospects to sell into China's economy, including banking sector and other sectors of the economy. We've got to maintain that balance correct."

The Treasury chief also affirmed she was cooperating with G7 counterparts "regarding our own essential resources plan, so that we are less reliant."

NHS Drug Costs and Funding

Reeves also recognized that the cost the NHS pays for medicines could go up as a consequence of current negotiations with the US government and its pharmaceutical firms, in return for lower tariffs and capital.

Some of the world's largest pharmaceutical manufacturers have said recently that they are either delaying or abandoning investments in the United Kingdom, with some blaming the insufficient payments they are getting.

Recently, the Science Minister said the price the NHS spends on medicines would need to rise to stop companies and drug research funding leaving the UK.

Reeves informed the BBC: "It has been observed as a result of the pricing regime, that medical research, recent pharmaceuticals have not been offered in the United Kingdom in the extent that they are in other European countries."

"The objective is to make sure that people receiving treatment from the NHS are can access the best essential treatments in the world. And so we are examining all of that, and... seeking to secure additional investment into the UK."