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Chancellor Rachel Reeves has revealed she is preparing "targeted steps to address cost of living pressures" in next month's Budget.

In comments to the BBC, she emphasized that lowering inflation is a shared duty of both the government and the central bank.

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

Possible Energy Bill Interventions

It is understood the administration could intervene to reduce utility costs, for example by slashing the present 5% rate of value-added tax applied on energy.

A further possibility is to reduce some of the government charges presently added to bills.

Budgetary Constraints and Expert Expectations

The government will obtain the next report from the independent fiscal watchdog, the Office for Budget Responsibility, on Monday, which will reveal how much scope there is for these actions.

The view from most analysts is that the Chancellor will have to announce higher taxes or expenditure reductions in order to fulfill her declared fiscal targets.

Earlier on Thursday, estimates indicated there was a £22 billion deficit for the Treasury chief to fill, which is at the lower end of expectations.

"There's a joint job between the central bank and the government to further reduce some of the causes of price increases," Reeves informed the BBC in the US capital, at the conferences of the International Monetary Fund and global financial institution.

Revenue Commitments and Global Issues

While much of the attention has been on expected tax increases, the Treasury chief said the latest data from the fiscal watchdog had not altered her vow to campaign commitments not to raise rates on income tax, VAT or social security contributions.

She blamed an "uncertain world" with growing geopolitical and commercial tensions for the Budget revenue measures, likely to be targeted on those "with the broadest shoulders."

International Economic Tensions

Commenting on apprehensions about the United Kingdom's economic relations with the Asian nation she said: "Our security interests always are paramount."

Recent declaration by China to increase trade restrictions on rare earths and other resources that are crucial for high-technology production led US President the US President to threaten an further 100% import tax on goods from China, raising the risk of an all-out commercial conflict between the two largest economies.

The US Treasury Secretary described China's decision "economic coercion" and "a international production power grab."

Asked about considering the US offer to participate in its battle with China, the Chancellor said she was "very concerned" by China's measures and urged the Beijing authorities "not to put up barriers and limit trade."

She said the move was "harmful for the international commerce and creates additional obstacles."

"I believe there are fields where we must address Chinese policies, but there are also significant opportunities to export to Chinese markets, including banking sector and other sectors of the economy. We've got to maintain that balance right."

The Treasury chief also confirmed she was working with international partners "regarding our own essential resources plan, so that we are reduced dependence."

Health Service Drug Pricing and Investment

Reeves also admitted that the cost the National Health Service pays for drugs could go up as a result of ongoing discussions with the US government and its drugs companies, in exchange for reduced taxes and funding.

Some of the biggest global drug companies have said in recent statements that they are either pausing or scrapping operations in the United Kingdom, with some attributing the modest returns they are obtaining.

Recently, the Science Minister said the price the NHS spends on drugs would need to go up to stop companies and drug research funding leaving the UK.

The Chancellor stated to the BBC: "We have seen due to the pricing regime, that clinical trials, innovative medicines have not been offered in the United Kingdom in the manner that they are in other EU nations."

"We want to guarantee that people receiving treatment from the National Health Service are can obtain the top critical drugs in the world. And so we are examining all of that, and... seeking to obtain increased funding into Britain."