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Chancellor Rachel Reeves has revealed she is planning "specific measures to deal with cost of living issues" in next month's Budget.

In comments to the BBC, she noted that reducing price rises is a joint duty of both the government and the central bank.

The United Kingdom's inflation rate is expected to be the highest among the Group of Seven advanced economies this calendar year and next.

Potential Energy Cost Measures

It is understood the administration could intervene to bring down energy bills, for example by slashing the present 5% rate of value-added tax applied on energy.

An additional possibility is to cut some of the policy costs presently included in bills.

Budgetary Limitations and Expert Predictions

The administration will receive the next assessment from the official forecaster, the Office for Budget Responsibility, on Monday, which will reveal how much space there is for such measures.

The view from the majority of analysts is that the Chancellor will have to announce tax increases or budget cuts in order to meet her voluntary debt limits.

Previously on the same day, analysis indicated there was a £22bn shortfall for the chancellor to resolve, which is at the more modest range of expectations.

"It is a joint responsibility between the Bank of England and the government to further reduce some of the sources of inflation," the Chancellor stated to the BBC in Washington, at the yearly gatherings of the International Monetary Fund and World Bank.

Tax Commitments and Global Concerns

While a great deal of the attention has been on expected tax rises, the Treasury chief said the latest information from the fiscal watchdog had not changed her commitment to campaign commitments not to raise tax levels on income tax, VAT or social security contributions.

She blamed an "unpredictable global environment" with growing international and trade tensions for the Budget tax moves, probably to be focused on those "most able to pay."

International Trade Tensions

Commenting on apprehensions about the UK's trade ties with the Asian nation she said: "The UK's national security invariably come first."

Last week's statement by China to tighten trade restrictions on rare earths and other resources that are crucial for advanced tech manufacturing led US President the US President to propose an extra 100% tariff on goods from the Asian country, increasing the risk of an full-scale trade war between the two largest economies.

The American finance chief called China's decision "economic coercion" and "a international production power grab."

Inquired about considering the American proposal to participate in its battle with the Asian nation, the Chancellor said she was "very concerned" by China's actions and encouraged the Beijing authorities "not to put up barriers and restrict access."

She said the move was "damaging for the global economy and generates additional obstacles."

"It is my opinion there are sectors where we should challenge Chinese policies, but there are also valuable chances to export to China's economy, including financial services and other areas of the economic system. We've got to achieve that balance correct."

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

NHS Drug Pricing and Investment

The Chancellor also recognized that the cost the National Health Service spends on medicines could go up as a consequence of current negotiations with the Trump administration and its pharmaceutical firms, in exchange for reduced taxes and funding.

Some of the biggest global pharmaceutical manufacturers have said lately that they are either pausing or scrapping operations in the UK, with some attributing the modest returns they are receiving.

Last month, the Science Minister said the cost the NHS spends on medicines would have to rise to halt firms and drug research funding departing from the United Kingdom.

Reeves stated to the BBC: "It has been observed as a result of the payment system, that drug testing, recent pharmaceuticals have not been offered in the United Kingdom in the manner that they are in other European countries."

"Our aim is to ensure that people receiving treatment from the NHS are can receive the finest critical medicines in the world. And so we are looking at this situation, and... looking to attract increased funding into Britain."