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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.

Speaking to the BBC, she emphasized that curbing price rises is a shared responsibility of both the government and the Bank of England.

The UK's inflation rate is forecast to be the most elevated among the Group of Seven advanced economies this year and next.

Potential Utility Cost Measures

Reports indicate the government could take action to lower utility costs, for instance by slashing the current 5% rate of value-added tax applied on energy.

Another approach is to lower some of the government charges presently added to bills.

Fiscal Constraints and Analyst Predictions

The administration will receive the latest report from the independent fiscal watchdog, the OBR, on the start of the week, which will reveal how much space there is for such actions.

The view from most analysts is that Reeves will have to announce higher taxes or spending cuts in order to fulfill her voluntary fiscal targets.

Earlier on Thursday, analysis indicated there was a £22 billion shortfall for the Treasury chief to fill, which is at the more modest range of forecasts.

"It is a shared task between the Bank of England and the administration to continue tackling some of the drivers of price increases," the Chancellor informed reporters in Washington, at the conferences of the International Monetary Fund and World Bank.

Revenue Pledges and Global Concerns

While a great deal of the focus has been on likely 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 attributed an "unpredictable world" with rising international and commercial concerns for the fiscal revenue measures, likely to be targeted on those "wealthiest."

Global Trade Disputes

Commenting on worries about the United Kingdom's commercial links with China she said: "The UK's national security invariably are paramount."

Recent announcement by China to strengthen trade restrictions on critical minerals and other materials that are crucial for high-technology production led US President Donald Trump to propose an additional 100% tariff on goods from China, raising the prospect of an all-out commercial conflict between the two global powers.

The American finance chief called China's decision "commercial pressure" and "a global supply chain power grab."

Asked about considering the American proposal to join its battle with the Asian nation, Reeves said she was "deeply worried" by China's measures and encouraged the Chinese government "to avoid restrictions and restrict access."

She said the action was "damaging for the global economy and causes further obstacles."

"I believe there are areas where we should address Chinese policies, but there are also significant opportunities to export to China's economy, including financial services and other sectors of the economic system. We've got to get that balance right."

The chancellor also affirmed she was working with G7 counterparts "regarding our own essential resources strategy, so that we are reduced dependence."

Health Service Medicine Pricing and Funding

Reeves also acknowledged that the price the NHS pays for pharmaceuticals could increase as a result of ongoing talks with the US government and its drugs companies, in exchange for reduced taxes and investment.

A number of the world's largest pharmaceutical manufacturers have said in recent statements that they are either halting or abandoning investments in the United Kingdom, with some blaming the modest returns they are obtaining.

Recently, the Science Minister said the price the NHS spends on medicines would have to increase to halt businesses and pharmaceutical investment departing from the United Kingdom.

The Chancellor stated to media: "It has been observed as a result of the cost structure, that drug testing, new drugs have not been provided in the United Kingdom in the extent that they are in other EU nations."

"Our aim is to ensure that patients receiving treatment from the National Health Service are able to access the top critical treatments in the globe. And so we are examining these issues, and... aiming to attract more funding into the UK."