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Chancellor Reeves has announced she is planning "targeted measures to tackle cost of living challenges" in the forthcoming Budget.

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

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

Potential Energy Cost Measures

It is understood the government could intervene to bring down utility costs, for example by slashing the present 5% rate of VAT charged on energy supplies.

Another possibility is to cut some of the policy costs currently included in household expenses.

Budgetary Limitations and Expert Expectations

The government will obtain the latest assessment from the official forecaster, the OBR, on Monday, which will reveal how much room there is for such measures.

The expectation from the majority of analysts is that the Chancellor will have to announce tax rises or spending cuts in order to fulfill her declared fiscal targets.

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

"It is a shared responsibility between the central bank and the administration to bear down further on some of the causes of price increases," Reeves stated to the BBC in the US capital, at the annual meetings of the International Monetary Fund and global financial institution.

Tax Commitments and International Issues

While much of the attention has been on likely tax rises, the chancellor said the latest information from the fiscal watchdog had not changed her vow to campaign commitments not to raise tax levels on income tax, VAT or social security contributions.

She blamed an "unpredictable world" with increasing geopolitical and trade tensions for the Budget tax moves, probably to be focused on those "most able to pay."

International Trade Tensions

Referring to worries about the United Kingdom's trade ties with the Asian nation she said: "The UK's national security invariably take priority."

Last week's statement by China to tighten trade restrictions on rare earths and other materials that are crucial for high-technology production led American leader the US President to suggest an further 100% import tax on goods from China, increasing the possibility of an all-out commercial conflict between the two global powers.

The US Treasury Secretary labeled China's action "commercial pressure" and "a international production power grab."

Inquired about considering the American proposal to join its dispute with China, the Chancellor said she was "extremely troubled" by Chinese measures and urged the Beijing authorities "not to put up barriers and restrict access."

She said the move was "damaging for the world economy and creates further obstacles."

"It is my opinion there are fields where we must address China, but there are also important opportunities to trade with Chinese markets, including financial services and other areas of the economy. We've got to get that equilibrium correct."

The chancellor also confirmed she was working with other major economies "on our own critical minerals strategy, so that we are reduced dependence."

Health Service Medicine Pricing and Investment

The Chancellor also recognized that the price the NHS pays for drugs could go up as a consequence of current talks with the US government and its drugs companies, in exchange for lower tariffs and funding.

Some of the world's largest pharmaceutical manufacturers have said in recent statements that they are either halting or abandoning operations in the United Kingdom, with several blaming the low prices they are receiving.

Recently, the government science advisor said the cost the health service spends on medicines would have to increase to prevent companies and drug research funding leaving the UK.

The Chancellor told the BBC: "We have seen because of the payment system, that drug testing, new drugs have not been provided in the UK in the extent that they are in other EU nations."

"Our aim is to guarantee that patients receiving treatment from the National Health Service are can obtain the finest critical medicines in the world. And so we are reviewing this situation, and... looking to attract more funding into the UK."