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Treasury head Rachel Reeves has announced she is preparing "targeted steps to tackle cost of living issues" in the upcoming Budget.

During an interview with the BBC, she noted that lowering inflation is a shared task of both the administration and the Bank of England.

The United Kingdom's price growth is expected to be the highest among the Group of Seven advanced economies this year and the following year.

Possible Utility Cost Measures

Sources suggest the administration could intervene to lower utility costs, such as by reducing the current 5% level of VAT charged on energy.

Another option is to reduce some of the regulatory levies presently added to household expenses.

Fiscal Limitations and Analyst Expectations

The government will receive the next report from the independent fiscal watchdog, the OBR, on Monday, which will show how much room there is for these actions.

The view from most analysts is that Reeves will have to introduce tax rises or expenditure reductions in order to fulfill her self-imposed debt limits.

Previously on the same day, estimates suggested there was a £22bn shortfall for the Treasury chief to resolve, which is at the more modest range of projections.

"There's a joint task between the central bank and the government to bear down further on some of the sources of price increases," the Chancellor informed reporters in Washington, at the annual meetings of the International Monetary Fund and global financial institution.

Revenue Commitments and International Issues

While much of the attention has been on expected tax rises, the Treasury chief said the most recent information from the fiscal watchdog had not altered her commitment to manifesto promises not to raise tax levels on income tax, VAT or social security contributions.

She blamed an "unpredictable global environment" with rising international and commercial concerns for the fiscal revenue measures, probably to be focused on those "most able to pay."

International Trade Tensions

Addressing apprehensions about the UK's commercial links with China she said: "The UK's security interests always are paramount."

Recent announcement by Chinese authorities to strengthen export controls on rare earths and other materials that are essential for high-technology production led US President the US President to threaten an extra 100% import tax on imports from China, increasing the possibility of an all-out trade war between the two global powers.

The American finance chief labeled the Chinese decision "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 Chinese measures and urged the Chinese government "not to put up barriers and limit trade."

She said the decision was "harmful for the international commerce and creates further obstacles."

"It is my opinion there are areas where we should confront Chinese policies, but there are also valuable opportunities to export to Chinese markets, including banking sector and other sectors of the economic system. We've got to get that equilibrium correct."

The Treasury chief also affirmed she was working with international partners "regarding our own critical minerals strategy, so that we are reduced dependence."

Health Service Drug Pricing and Funding

The Chancellor also admitted that the cost the NHS pays for pharmaceuticals could go up as a result of ongoing discussions with the US government and its drugs companies, in return for lower tariffs and funding.

Some of the world's largest pharmaceutical manufacturers have said in recent statements that they are either delaying or scrapping investments in the UK, with some attributing the insufficient payments they are obtaining.

Last month, the government science advisor said the cost the health service pays for drugs would have to increase to halt businesses and drug research funding departing from the United Kingdom.

Reeves told media: "We have seen as a result of the payment system, that clinical trials, recent pharmaceuticals have not been available in the United Kingdom in the extent that they are in other European countries."

"We want to make sure that individuals getting treatment from the National Health Service are can receive the finest essential medicines in the world. And so we are looking at these issues, and... looking to obtain additional capital into the UK."