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

Speaking to the BBC, she noted that curbing inflation is a collective task of both the government and the central bank.

The UK's price growth is projected to be the highest among the Group of Seven developed nations this calendar year and the following year.

Potential Energy Cost Interventions

Sources suggest the government could take action to lower utility costs, for example by cutting the present 5% level of value-added tax applied on energy supplies.

An additional possibility is to lower some of the policy costs presently included in household expenses.

Budgetary Constraints and Expert Expectations

The administration will receive the next assessment from the independent fiscal watchdog, the Office for Budget Responsibility, on Monday, which will reveal how much space there is for these actions.

The expectation from the majority of experts is that the Chancellor will have to announce tax increases or spending cuts in order to fulfill her declared borrowing rules.

Previously on Thursday, analysis showed there was a £22bn shortfall for the chancellor to fill, which is at the lower end of projections.

"It is a shared job between the Bank of England and the administration to continue tackling some of the causes of inflation," the Chancellor told reporters in Washington, at the conferences of the International Monetary Fund and global financial institution.

Tax Commitments and Global Concerns

While much of the attention has been on probable tax rises, the chancellor said the latest information from the fiscal watchdog had not changed her pledge to manifesto promises not to raise rates on income tax, sales tax or social security contributions.

She attributed an "unpredictable world" with growing international and trade tensions for the Budget revenue measures, probably to be targeted on those "most able to pay."

Global Economic Disputes

Addressing apprehensions about the United Kingdom's trade ties with the Asian nation she said: "The UK's national security always take priority."

Recent announcement by Chinese authorities to increase trade restrictions on critical minerals and other resources that are key for high-technology manufacturing led American leader the US President to suggest an additional 100% import tax on imports from China, raising the prospect of an full-scale commercial conflict between the two global powers.

The US Treasury Secretary called the Chinese decision "commercial pressure" and "a global supply chain power grab."

Questioned on considering the US offer to join its dispute with China, Reeves said she was "deeply worried" by China's measures and urged the Beijing authorities "to avoid restrictions and limit trade."

She said the move was "bad for the international commerce and causes further obstacles."

"It is my opinion there are areas where we should challenge Chinese policies, but there are also valuable prospects to trade with Chinese markets, including banking sector and other sectors of the economy. We've got to get that equilibrium appropriate."

The chancellor also confirmed she was working with G7 counterparts "on our own essential resources strategy, so that we are reduced dependence."

NHS Medicine Pricing and Investment

Reeves also recognized that the price the National Health Service pays for pharmaceuticals could go up as a consequence of ongoing talks with the Trump administration and its pharmaceutical firms, in exchange for lower tariffs and capital.

A number of the biggest global pharmaceutical manufacturers have said recently that they are either delaying or canceling investments in the United Kingdom, with some attributing the insufficient payments they are getting.

Last month, the government science advisor said the price the NHS spends on medicines would must rise to stop businesses and drug research funding leaving the United Kingdom.

The Chancellor stated to media: "It has been observed because of the payment system, that medical research, innovative medicines have not been provided in the UK in the way that they are in other continental states."

"We want to make sure that people receiving treatment from the NHS are can receive the finest essential medicines in the globe. And so we are examining this situation, and... looking to obtain more capital into Britain."