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Chancellor Rachel Reeves has revealed she is preparing "targeted measures to tackle cost of living challenges" in the upcoming financial statement.

During an interview with the BBC, she noted that lowering inflation is a collective duty of both the government and the Bank of England.

The UK's inflation rate is forecast to be the highest among the Group of Seven industrialized countries this year and the following year.

Possible Energy Cost Measures

It is understood the government could take action to reduce energy bills, for instance by reducing the current 5% rate of VAT applied on energy.

Another option is to reduce some of the regulatory levies currently added to bills.

Budgetary Constraints and Expert Expectations

The administration will obtain the latest draft from the independent fiscal watchdog, the Office for Budget Responsibility, on Monday, which will clarify how much room there is for these measures.

The consensus from most analysts is that the Chancellor will have to declare tax rises or expenditure reductions in order to meet her voluntary fiscal targets.

Earlier on Thursday, calculations suggested there was a twenty-two billion pound deficit for the Treasury chief to address, which is at the lower end of expectations.

"There's a joint task between the central bank and the administration to bear down further on some of the drivers of price increases," Reeves informed reporters in Washington, at the yearly gatherings of the IMF and global financial institution.

Revenue Pledges and International Issues

While a great deal of the attention has been on probable tax rises, the chancellor said the latest figures from the fiscal watchdog had not changed her pledge to campaign commitments not to raise rates on income tax, sales tax or social security contributions.

She attributed an "uncertain global environment" with rising international and trade issues for the Budget revenue measures, likely to be targeted on those "with the broadest shoulders."

Global Economic Disputes

Commenting on worries about the UK's economic relations with China she said: "Our security interests always come first."

Recent declaration by Chinese authorities to increase export controls on critical minerals and other resources that are essential for advanced tech manufacturing led US President Donald Trump to threaten an additional 100% import tax on imports from China, raising the possibility of an all-out commercial conflict between the two largest economies.

The US Treasury Secretary described the Chinese move "economic coercion" and "a international production power grab."

Inquired about considering the US offer to join its conflict with China, the Chancellor said she was "deeply worried" by Chinese actions and urged the Chinese government "not to put up barriers and limit trade."

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

"I believe there are areas where we must address China, but there are also important opportunities to export to Chinese markets, including financial services and other sectors of the economy. We've got to maintain that equilibrium appropriate."

The chancellor also confirmed she was collaborating with other major economies "on our own critical minerals approach, so that we are less reliant."

Health Service Medicine Pricing and Funding

Reeves also admitted that the price the NHS pays for pharmaceuticals could rise as a consequence of ongoing discussions with the US government and its pharmaceutical firms, in return for lower tariffs and capital.

Some of the biggest global pharmaceutical manufacturers have said recently that they are either delaying or scrapping projects in the UK, with some attributing the low prices they are obtaining.

Recently, the government science advisor said the cost the NHS spends on drugs would must increase to halt businesses and drug research funding departing from the United Kingdom.

Reeves told media: "It has been observed because of the pricing regime, that drug testing, recent pharmaceuticals have not been offered in the UK in the manner that they are in other EU nations."

"The objective is to guarantee that patients receiving care from the National Health Service are able to receive the best life-saving medicines in the world. And so we are looking at this situation, and... looking to secure increased capital into Britain."