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Chancellor Rachel Reeves has revealed she is planning "targeted steps to address cost of living challenges" in the forthcoming Budget.

In comments to the BBC, she emphasized that lowering price rises is a shared responsibility of both the administration and the central bank.

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

Possible Energy Bill Measures

Reports indicate the government could take action to reduce energy bills, for example by slashing the present 5% rate of value-added tax applied on energy supplies.

An additional possibility is to lower some of the regulatory levies presently included in bills.

Budgetary Constraints and Expert Expectations

The government will receive the latest draft from the official forecaster, the Office for Budget Responsibility, on Monday, which will clarify how much scope there is for these measures.

The expectation from the majority of economists is that the Chancellor will have to announce higher taxes or budget cuts in order to fulfill her declared borrowing rules.

Earlier on the same day, estimates suggested there was a £22bn deficit for the Treasury chief to address, which is at the more modest range of expectations.

"There's a joint task between the central bank and the administration to bear down further on some of the sources of price increases," the Chancellor told the BBC in the US capital, at the conferences of the International Monetary Fund and World Bank.

Revenue Pledges and Global Issues

While much of the attention has been on likely tax increases, the Treasury chief said the most recent information from the fiscal watchdog had not changed her vow to manifesto promises not to increase tax levels on income tax, sales tax or National Insurance.

She blamed an "unpredictable global environment" with increasing international and trade tensions for the fiscal revenue measures, likely to be targeted on those "most able to pay."

International Trade Disputes

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

Recent statement by Chinese authorities to tighten trade restrictions on critical minerals and other materials that are crucial for high-technology manufacturing led American leader Donald Trump to threaten an extra 100% tariff on imports from the Asian country, raising the possibility of an full-scale commercial conflict between the two global powers.

The American finance chief called China's move "commercial pressure" and "a global supply chain control attempt."

Inquired about accepting the US offer to join its battle with China, Reeves said she was "deeply worried" by Chinese measures and called on the Chinese government "to avoid restrictions and limit trade."

She said the decision was "harmful for the world economy and causes additional obstacles."

"I believe there are areas where we need to confront Chinese policies, but there are also significant chances to trade with Chinese markets, including financial services and other areas of the economy. We've got to get that equilibrium correct."

The Treasury chief also stated she was collaborating with other major economies "regarding our own essential resources plan, so that we are less reliant."

NHS Drug Costs and Funding

The Chancellor also acknowledged that the price the NHS pays for pharmaceuticals could rise as a result of current negotiations with the US government and its drugs companies, in exchange for lower tariffs and capital.

A number of the world's largest pharmaceutical manufacturers have said in recent statements that they are either delaying or abandoning projects in the UK, with some blaming the insufficient payments they are receiving.

Recently, the Science Minister said the price the health service spends on medicines would have to rise to stop businesses and drug research funding leaving the United Kingdom.

The Chancellor informed media: "It has been observed as a result of the cost structure, that medical research, new drugs have not been offered in the UK in the way that they are in other continental states."

"We want to ensure that individuals getting care from the National Health Service are can access the finest life-saving drugs in the world. And so we are examining all of that, and... seeking to obtain more investment into Britain."