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Chancellor Rachel Reeves has stated she is preparing "specific measures to address cost of living challenges" in the forthcoming financial statement.

Speaking to the BBC, she emphasized that curbing inflation is a joint duty of both the government and the Bank of England.

The UK's price growth is projected to be the most elevated among the Group of Seven industrialized countries this year and the following year.

Potential Energy Cost Interventions

It is understood the government could take action to lower energy bills, for example by slashing the present 5% rate of VAT charged on energy supplies.

Another option is to lower some of the policy costs currently included in household expenses.

Budgetary Constraints and Expert Expectations

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

The consensus from most economists is that the Chancellor will have to declare tax rises or spending cuts in order to meet her voluntary debt limits.

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

"There's a shared task between the Bank of England and the administration to further reduce some of the causes of inflation," the Chancellor stated to the BBC in Washington, at the yearly gatherings of the IMF and global financial institution.

Tax Commitments and Global Concerns

While much of the focus has been on probable tax rises, the Treasury chief said the latest data from the OBR had not altered her commitment to election pledges not to raise rates on earnings tax, VAT or social security contributions.

She attributed an "unpredictable world" with growing international and trade concerns for the Budget revenue measures, likely to be targeted on those "most able to pay."

Global Trade Tensions

Addressing apprehensions about the United Kingdom's trade ties with the Asian nation she said: "The UK's security interests invariably are paramount."

Recent statement by Chinese authorities to tighten trade restrictions on rare earths and other materials that are crucial for advanced tech manufacturing led US President Donald Trump to suggest an extra 100% import tax on goods from the Asian country, raising the prospect of an full-scale commercial conflict between the two global powers.

The American finance chief described the Chinese action "economic coercion" and "a global supply chain control attempt."

Questioned on accepting the US offer to join its dispute with the Asian nation, Reeves said she was "very concerned" by Chinese actions and urged the Beijing authorities "not to put up barriers and limit trade."

She said the action was "harmful for the international commerce and creates further headwinds."

"I believe there are fields where we need to challenge Chinese policies, but there are also valuable chances to export to China's economy, including financial services and other areas of the economy. We've got to achieve that balance right."

The Treasury chief also stated she was cooperating with international partners "regarding our own critical minerals plan, so that we are less reliant."

NHS Medicine Costs and Funding

The Chancellor also admitted that the cost the NHS pays for medicines could rise as a consequence of ongoing discussions with the Trump administration and its drugs companies, in return for lower tariffs and funding.

A number of the biggest global drug companies have said in recent statements that they are either halting or canceling investments in the United Kingdom, with some blaming the low prices they are getting.

Last month, the Science Minister said the cost the health service pays for drugs would have to go up to prevent firms and pharmaceutical investment departing from the United Kingdom.

The Chancellor stated to media: "We have seen due to the cost structure, that drug testing, recent pharmaceuticals have not been offered in the UK in the manner that they are in other continental states."

"We want to ensure that patients getting care from the National Health Service are can obtain the best life-saving medicines in the globe. And so we are reviewing this situation, and... aiming to obtain increased funding into the UK."