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Chancellor Rachel Reeves has announced she is preparing "specific measures to address cost of living challenges" in the forthcoming financial statement.

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

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

Potential Energy Cost Measures

It is understood the administration could intervene to lower utility costs, for instance by reducing the present 5% rate of value-added tax charged on energy supplies.

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

Fiscal Limitations and Expert Expectations

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

The consensus from most experts is that the Chancellor will have to declare higher taxes or spending cuts in order to adhere to her self-imposed borrowing rules.

Previously on the same day, estimates suggested there was a £22 billion gap for the Treasury chief to resolve, which is at the lower end of projections.

"It is a joint job between the Bank of England and the administration to continue tackling some of the drivers of inflation," Reeves told the BBC in Washington, at the annual meetings of the International Monetary Fund and World Bank.

Revenue Pledges and International Issues

While a great deal of the attention has been on probable tax rises, the Treasury chief said the latest figures from the fiscal watchdog had not changed her pledge to manifesto promises not to increase tax levels on income tax, sales tax or social security contributions.

She blamed an "unpredictable global environment" with increasing international and commercial concerns for the fiscal revenue measures, likely to be focused on those "wealthiest."

Global Economic Tensions

Addressing apprehensions about the United Kingdom's economic relations with the Asian nation she said: "Our national security always take priority."

Last week's statement by China to strengthen export controls on rare earths and other resources that are crucial for advanced tech manufacturing led American leader Donald Trump to suggest an additional 100% tariff on goods from China, raising the possibility of an full-scale trade war between the two global powers.

The American finance chief called the Chinese move "commercial pressure" and "a international production power grab."

Questioned on accepting the American proposal to participate in its battle with China, the Chancellor said she was "very concerned" by China's actions and called on the Beijing authorities "to avoid restrictions and limit trade."

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

"In my view there are sectors where we should address Chinese policies, but there are also important opportunities to export to China's economy, including banking sector and other areas of the economy. We've got to maintain that balance correct."

The Treasury chief also affirmed she was cooperating with other major economies "regarding our own essential resources plan, so that we are more independent."

Health Service Drug Pricing and Funding

The Chancellor also admitted that the price the National Health Service spends on drugs could increase as a consequence of ongoing talks with the Trump administration and its pharmaceutical firms, in return for lower tariffs and investment.

Some of the biggest global pharmaceutical manufacturers have said lately that they are either halting or abandoning investments in the UK, with some blaming the low prices they are receiving.

Last month, the Science Minister said the price the NHS spends on medicines would need to rise to stop companies and drug research funding departing from the UK.

Reeves stated to the BBC: "We have seen as a result of the cost structure, that medical research, new drugs have not been provided in the United Kingdom in the manner that they are in other continental states."

"We want to guarantee that patients receiving treatment from the NHS are can obtain the top essential treatments in the world. And so we are examining this situation, and... seeking to attract more capital into Britain."