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Chancellor Rachel Reeves has announced she is planning "focused steps to address cost of living challenges" in next month's Budget.

In comments to the BBC, she stated that lowering price rises is a joint duty of both the administration and the central bank.

The UK's inflation rate is expected to be the highest among the G7 industrialized countries this calendar year and the following year.

Potential Energy Cost Measures

It is understood the administration could take action to bring down utility costs, for instance by slashing the present 5% rate of value-added tax applied on energy.

A further option is to lower some of the policy costs currently added to bills.

Fiscal Limitations and Analyst Expectations

The government will receive the latest report from the official forecaster, the OBR, on Monday, which will clarify how much room there is for these actions.

The view from most analysts is that the Chancellor will have to declare higher taxes or budget cuts in order to fulfill her self-imposed borrowing rules.

Previously on Thursday, analysis showed there was a twenty-two billion pound shortfall for the Treasury chief to address, which is at the more modest range of forecasts.

"It is a shared job between the central bank and the administration to continue tackling some of the sources of price increases," the Chancellor stated to reporters in Washington, at the conferences of the IMF and World Bank.

Tax Pledges and Global Concerns

While a great deal of the attention has been on likely tax rises, the chancellor said the latest figures from the OBR had not changed her pledge to campaign commitments not to increase rates on earnings tax, sales tax or National Insurance.

She attributed an "uncertain global environment" with growing international and trade concerns for the Budget tax moves, likely to be focused on those "most able to pay."

International Economic Disputes

Addressing concerns about the United Kingdom's trade ties with the Asian nation she said: "Our security interests always come first."

Recent announcement by China to strengthen trade restrictions on rare earths and other materials that are essential for high-technology production led US President Donald Trump to propose an additional 100% tariff on goods from the Asian country, increasing the prospect of an all-out trade war between the two economic giants.

The US Treasury Secretary called the Chinese move "economic coercion" and "a international production control attempt."

Questioned on accepting the US offer to participate in its battle with the Asian nation, Reeves said she was "extremely troubled" by China's actions and encouraged the Chinese government "to avoid restrictions and limit trade."

She said the move was "harmful for the global economy and generates further headwinds."

"I believe there are sectors where we must address China, but there are also valuable prospects to export to Chinese markets, including banking sector and other sectors of the economy. We've got to achieve that balance correct."

The chancellor also stated she was cooperating with other major economies "on our own essential resources strategy, so that we are more independent."

Health Service Drug Pricing and Investment

Reeves also acknowledged that the cost the NHS pays for pharmaceuticals could rise as a consequence of ongoing negotiations with the US government and its drugs companies, in return for reduced taxes and funding.

Some of the world's largest drug companies have said recently that they are either delaying or abandoning projects in the UK, with several blaming the low prices they are obtaining.

Last month, the Science Minister said the cost the NHS spends on drugs would have to increase to prevent businesses and pharmaceutical investment departing from the United Kingdom.

The Chancellor stated to the BBC: "We have seen due to the payment system, that drug testing, recent pharmaceuticals have not been available in the United Kingdom in the manner that they are in other European countries."

"We want to guarantee that patients receiving treatment from the NHS are can access the best essential medicines in the globe. And so we are examining this situation, and... looking to secure increased capital into Britain."