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Chancellor Rachel Reeves has announced she is preparing "focused steps to deal with cost of living pressures" in next month's financial statement.

In comments to the BBC, she stated that lowering inflation is a shared task of both the government and the central bank.

The United Kingdom's inflation rate is projected to be the most elevated among the G7 advanced economies this calendar year and the following year.

Possible Energy Bill Interventions

Reports indicate the government could take action to reduce utility costs, such as by cutting the present 5% rate of VAT applied on energy.

A further option is to cut some of the government charges currently added to bills.

Fiscal Limitations and Analyst Predictions

The government will obtain the next report from the official forecaster, the OBR, on Monday, which will show how much room there is for such measures.

The consensus from most analysts is that the Chancellor will have to announce higher taxes or budget cuts in order to fulfill her voluntary fiscal targets.

Previously on Thursday, calculations 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 shared task between the central bank and the government to continue tackling some of the causes of price increases," the Chancellor told the BBC in the US capital, at the annual meetings of the IMF and World Bank.

Revenue Pledges and Global Issues

While much of the attention has been on likely tax rises, the chancellor said the latest information from the fiscal watchdog had not altered her pledge to election pledges not to increase rates on income tax, VAT or social security contributions.

She attributed an "uncertain global environment" with rising international and trade tensions for the fiscal tax moves, probably to be directed on those "with the broadest shoulders."

International Economic Disputes

Commenting on concerns about the United Kingdom's trade ties with China she said: "Our security interests always are paramount."

Last week's statement by China to strengthen export controls on critical minerals and other materials that are essential for advanced tech production led US President Donald Trump to propose an extra 100% tariff on imports from the Asian country, raising the possibility of an all-out trade war between the two economic giants.

The US Treasury Secretary described the Chinese action "commercial pressure" and "a international production control attempt."

Asked about considering the US offer to join its battle with China, the Chancellor said she was "very concerned" by China's actions and called on the Beijing authorities "not to put up barriers and limit trade."

She said the action was "harmful for the world economy and generates additional headwinds."

"In my view there are areas where we should address Chinese policies, but there are also significant prospects to trade with China's economy, including banking sector and other sectors of the economic system. We've got to maintain that balance appropriate."

The chancellor also affirmed she was cooperating with G7 counterparts "on our own critical minerals plan, so that we are more independent."

NHS Medicine Costs and Funding

Reeves also acknowledged that the price the National Health Service spends on medicines could go up as a consequence of ongoing negotiations with the Trump administration and its drugs companies, in return for lower tariffs and funding.

A number of the biggest global pharmaceutical manufacturers have said recently that they are either delaying or canceling projects in the UK, with some blaming the modest returns they are getting.

Recently, the government science advisor said the price the NHS pays for medicines would need to rise to halt firms and pharmaceutical investment leaving the UK.

The Chancellor stated to media: "It has been observed as a result of the pricing regime, that clinical trials, recent pharmaceuticals have not been provided in the United Kingdom in the way that they are in other European countries."

"Our aim is to guarantee that people receiving care from the NHS are can receive the top critical drugs in the globe. And so we are examining these issues, and... aiming to attract additional funding into Britain."