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Chancellor Rachel Reeves has stated she is planning "specific action to tackle cost of living issues" in the forthcoming financial statement.

Speaking to the BBC, she stated that curbing inflation is a shared responsibility of both the government and the central bank.

The United Kingdom's inflation rate is forecast to be the highest among the Group of Seven developed nations this calendar year and the following year.

Possible Utility Cost Interventions

Sources suggest the government could intervene to reduce energy bills, for example by cutting the current 5% level of VAT charged on energy.

An additional option is to reduce some of the regulatory levies presently included in bills.

Fiscal Limitations and Analyst Predictions

The government will receive the latest draft from the independent fiscal watchdog, the OBR, on the start of the week, which will reveal how much room there is for such measures.

The view from most economists is that the Chancellor will have to declare tax increases or budget cuts in order to meet her declared fiscal targets.

Earlier on the same day, calculations showed there was a twenty-two billion pound gap for the chancellor to fill, which is at the more modest range of expectations.

"There's a shared responsibility between the central bank and the administration to bear down further on some of the causes of inflation," Reeves stated to the BBC in Washington, at the annual meetings of the International Monetary Fund and World Bank.

Tax Pledges and Global Concerns

While a great deal of the focus has been on expected tax increases, the Treasury chief said the most recent data from the OBR had not changed her commitment to election pledges not to increase rates on income tax, sales tax or social security contributions.

She blamed an "unpredictable world" with increasing geopolitical and commercial issues for the Budget revenue measures, likely to be targeted on those "most able to pay."

Global Trade Tensions

Addressing concerns about the UK's commercial links with China she said: "Our national security always are paramount."

Recent declaration by China to increase trade restrictions on critical minerals and other resources that are key for high-technology production led US President Donald Trump to propose an extra 100% tariff on goods from China, increasing the possibility of an all-out trade war between the two economic giants.

The US Treasury Secretary called China's decision "commercial pressure" and "a global supply chain control attempt."

Asked about considering the US offer to participate in its battle with China, Reeves said she was "very concerned" by Chinese actions and encouraged the Chinese government "not to put up barriers and limit trade."

She said the move was "bad for the international commerce and creates additional challenges."

"I believe there are fields where we must challenge Chinese policies, but there are also important chances to trade with Chinese markets, including financial services and other areas of the economic system. We've got to maintain that equilibrium right."

The chancellor also affirmed she was cooperating with other major economies "regarding our own critical minerals plan, so that we are reduced dependence."

Health Service Drug Pricing and Funding

Reeves also recognized that the price the NHS spends on medicines could increase as a result of current discussions with the Trump administration and its drugs companies, in exchange for reduced taxes and funding.

Some of the world's largest pharmaceutical manufacturers have said lately that they are either pausing or abandoning investments in the United Kingdom, with several attributing the insufficient payments they are receiving.

Last month, the government science advisor said the price the health service spends on drugs would need to increase to stop companies and pharmaceutical investment leaving the UK.

Reeves stated to media: "We have seen due to the pricing regime, that medical research, innovative medicines have not been offered in the United Kingdom in the extent that they are in other EU nations."

"Our aim is to make sure that individuals receiving treatment from the NHS are able to receive the finest essential drugs in the world. And so we are reviewing these issues, and... aiming to obtain additional investment into the UK."