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Chancellor Reeves has announced she is planning "targeted action to tackle household expense issues" in next month's Budget.

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

The UK's inflation rate is expected to be the highest among the Group of Seven developed nations this year and next.

Potential Energy Bill Measures

Reports indicate the administration could take action to reduce energy bills, such as by slashing the current 5% rate of VAT applied on energy supplies.

A further option is to lower some of the regulatory levies currently added to bills.

Fiscal Limitations and Analyst Predictions

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

The view from most analysts is that the Chancellor will have to declare tax rises or expenditure reductions in order to fulfill her voluntary debt limits.

Previously on Thursday, calculations suggested there was a £22bn shortfall for the Treasury chief to resolve, which is at the lower end of projections.

"There's a shared task between the central bank and the government to further reduce some of the drivers of inflation," Reeves informed the BBC in the US capital, at the annual meetings of the IMF and World Bank.

Tax Commitments and International Concerns

While a great deal of the attention has been on probable tax increases, the Treasury chief said the most recent information from the OBR had not changed her commitment to election pledges not to raise rates on earnings tax, sales tax or National Insurance.

She attributed an "uncertain world" with growing geopolitical and commercial tensions for the fiscal tax moves, likely to be targeted on those "with the broadest shoulders."

International Economic Tensions

Referring to concerns about the UK's economic relations with the Asian nation she said: "Our security interests invariably come first."

Last week's statement by China to strengthen export controls on critical minerals and other resources that are key for advanced tech manufacturing led US President Donald Trump to propose an additional 100% import tax on imports from the Asian country, increasing the risk of an all-out trade war between the two economic giants.

The American finance chief called China's decision "commercial pressure" and "a international production control attempt."

Asked about accepting the American proposal to join its battle with China, Reeves said she was "extremely troubled" by Chinese actions and called on the Chinese government "to avoid restrictions and restrict access."

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

"I believe there are areas where we need to confront China, but there are also significant chances to sell into China's economy, including financial services and other areas of the economy. We've got to maintain that balance right."

The Treasury chief also confirmed she was collaborating with international partners "on our own critical minerals approach, so that we are less reliant."

NHS Drug Pricing and Funding

Reeves also admitted that the cost the National Health Service spends on drugs could go up as a result of current negotiations with the US government and its drugs companies, in exchange for lower tariffs and investment.

Some of the biggest global pharmaceutical manufacturers have said recently that they are either halting or canceling projects in the UK, with several attributing the low prices they are receiving.

Recently, the government science advisor said the cost the health service pays for drugs would have to go up to prevent firms and drug research funding leaving the UK.

The Chancellor told media: "We have seen due to the pricing regime, that drug testing, new drugs have not been offered in the United Kingdom in the extent that they are in other continental states."

"We want to ensure that patients getting care from the NHS are can obtain the best critical medicines in the world. And so we are examining these issues, and... seeking to attract more capital into the UK."