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Chancellor Rachel Reeves has announced she is preparing "targeted steps to tackle cost of living pressures" in the forthcoming Budget.

During an interview with media outlets, she noted that lowering price rises is a shared responsibility of both the administration and the central bank.

The United Kingdom's price growth is forecast to be the highest among the G7 advanced economies this year and next.

Potential Energy Bill Interventions

It is understood the government could intervene to reduce energy bills, such as by slashing the current 5% rate of VAT applied on energy supplies.

A further option is to reduce some of the policy costs currently included in household expenses.

Fiscal Constraints and Analyst Expectations

The administration will obtain the latest draft from the official forecaster, the OBR, on Monday, which will show how much room there is for these measures.

The consensus from most experts is that Reeves will have to declare tax increases or spending cuts in order to adhere to her declared borrowing rules.

Earlier on Thursday, estimates showed there was a £22 billion shortfall for the Treasury chief to resolve, which is at the more modest range of forecasts.

"It is a joint task between the central bank and the government to bear down further on some of the causes of price increases," the Chancellor told reporters in Washington, at the conferences of the IMF and global financial institution.

Revenue Pledges and International Concerns

While much of the attention has been on likely tax increases, the chancellor said the latest figures from the fiscal watchdog had not changed her pledge to election pledges not to raise tax levels on income tax, VAT or social security contributions.

She blamed an "uncertain global environment" with rising geopolitical and trade tensions for the fiscal revenue measures, likely to be directed on those "wealthiest."

Global Trade Disputes

Commenting on worries about the UK's economic relations with China she said: "The UK's national security always are paramount."

Last week's announcement by Chinese authorities to strengthen trade restrictions on critical minerals and other resources that are crucial for advanced tech manufacturing led American leader Donald Trump to threaten an additional 100% import tax on imports from the Asian country, increasing the prospect of an all-out commercial conflict between the two economic giants.

The American finance chief labeled China's move "economic coercion" and "a global supply chain power grab."

Inquired about accepting the American proposal to participate in its battle with China, Reeves said she was "deeply worried" by China's measures and encouraged the Beijing authorities "to avoid restrictions and restrict access."

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

"I believe there are areas where we should address China, but there are also important 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 stated she was working with other major economies "on our own essential resources approach, so that we are reduced dependence."

Health Service Medicine Pricing and Investment

The Chancellor also recognized that the cost the National Health Service spends on medicines could go up as a consequence of current negotiations with the US government and its drugs companies, in return for reduced taxes and capital.

A number of the biggest global drug companies have said in recent statements that they are either delaying or scrapping projects in the UK, with several blaming the insufficient payments they are getting.

Recently, the Science Minister said the cost the health service spends on medicines would have to go up to prevent firms and drug research funding leaving the UK.

The Chancellor told the BBC: "We have seen because of the pricing regime, that drug testing, recent pharmaceuticals have not been available in the United Kingdom in the way that they are in other EU nations."

"The objective is to ensure that people receiving care from the NHS are able to obtain the best critical drugs in the globe. And so we are reviewing this situation, and... looking to secure more capital into the UK."