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

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

The UK's price growth is expected to be the most elevated among the Group of Seven advanced economies this year and next.

Possible Energy Cost Interventions

Sources suggest the government could take action to bring down utility costs, such as by cutting the present 5% level of value-added tax applied on energy supplies.

An additional possibility is to cut some of the regulatory levies presently added to household expenses.

Budgetary Limitations and Analyst Predictions

The administration will obtain the next assessment from the independent fiscal watchdog, the Office for Budget Responsibility, on the start of the week, which will reveal how much room there is for such measures.

The expectation from most analysts is that Reeves will have to declare higher taxes or expenditure reductions in order to meet her voluntary borrowing rules.

Earlier on Thursday, analysis suggested there was a £22bn deficit for the chancellor to fill, which is at the lower end of projections.

"It is a joint responsibility between the Bank of England and the government to further reduce some of the causes of inflation," the Chancellor informed reporters in Washington, at the conferences of the International Monetary Fund and global financial institution.

Tax Pledges and International Concerns

While much of the focus has been on likely tax rises, the Treasury chief said the most recent data from the fiscal watchdog had not altered her pledge to manifesto promises not to increase rates on income tax, sales tax or social security contributions.

She blamed an "uncertain world" with rising international and trade tensions for the Budget revenue measures, likely to be focused on those "most able to pay."

Global Economic Disputes

Referring to worries about the UK's trade ties with the Asian nation she said: "The UK's security interests always are paramount."

Recent statement by China to increase export controls on rare earths and other resources that are crucial for advanced tech production led US President Donald Trump to propose an further 100% tariff on goods from China, raising the risk of an all-out commercial conflict between the two global powers.

The US Treasury Secretary called China's move "economic coercion" and "a global supply chain power grab."

Asked about considering the American proposal to join its dispute with the Asian nation, the Chancellor said she was "deeply worried" by Chinese actions and called on the Chinese government "to avoid restrictions and restrict access."

She said the move was "harmful for the international commerce and generates additional headwinds."

"It is my opinion there are fields where we should confront China, but there are also significant prospects to sell into Chinese markets, including financial services and other sectors of the economic system. We've got to achieve that equilibrium appropriate."

The chancellor also confirmed she was collaborating with G7 counterparts "on our own essential resources strategy, so that we are more independent."

Health Service Drug Costs and Funding

The Chancellor also acknowledged that the price the NHS pays for pharmaceuticals could go up as a result of current discussions with the US government and its pharmaceutical firms, in return for lower tariffs and funding.

Some of the biggest global pharmaceutical manufacturers have said in recent statements that they are either pausing or scrapping operations in the United Kingdom, with several blaming the modest returns they are receiving.

Last month, the government science advisor said the cost the health service pays for medicines would must rise to prevent firms and pharmaceutical investment leaving the United Kingdom.

Reeves informed media: "It has been observed due to the pricing regime, that drug testing, new drugs have not been offered in the United Kingdom in the manner that they are in other European countries."

"Our aim is to make sure that patients getting treatment from the National Health Service are able to obtain the top essential drugs in the globe. And so we are reviewing this situation, and... looking to secure increased funding into Britain."