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Treasury head Rachel Reeves has announced she is planning "focused action to deal with cost of living issues" in next month's Budget.

During an interview with media outlets, she noted that curbing inflation is a shared responsibility of both the government and the Bank of England.

The UK's inflation rate is expected to be the most elevated among the G7 advanced economies this year and the following year.

Possible Utility Bill Measures

Reports indicate the administration could take action to lower energy bills, for instance by slashing the present 5% level of VAT applied on energy.

Another possibility is to cut some of the government charges currently included in household expenses.

Fiscal Limitations and Analyst Expectations

The government will receive the latest draft from the independent fiscal watchdog, the Office for Budget Responsibility, on Monday, which will show how much scope there is for such actions.

The consensus from most experts is that the Chancellor will have to announce tax rises or budget cuts in order to fulfill her declared borrowing rules.

Previously on the same day, analysis indicated there was a £22bn shortfall for the chancellor to fill, which is at the more modest range of expectations.

"It is a collective responsibility between the central bank and the government to bear down further on some of the causes of inflation," Reeves told the BBC in Washington, at the conferences of the IMF and global financial institution.

Revenue Pledges and International Issues

While much of the focus has been on likely tax increases, the Treasury chief said the most recent figures from the fiscal watchdog had not changed her pledge to election pledges not to raise tax levels on income tax, VAT or National Insurance.

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

Global Trade Disputes

Commenting on apprehensions about the UK's economic relations with the Asian nation she said: "The UK's national security invariably are paramount."

Last week's declaration by China to tighten trade restrictions on rare earths and other materials that are essential for high-technology manufacturing led US President Donald Trump to threaten an further 100% tariff on goods from the Asian country, raising the prospect of an full-scale commercial conflict between the two largest economies.

The US Treasury Secretary called China's decision "economic coercion" and "a international production control attempt."

Inquired about considering the American proposal to join its battle with the Asian nation, the Chancellor said she was "extremely troubled" by Chinese measures and called on the Chinese government "to avoid restrictions and restrict access."

She said the decision was "damaging for the international commerce and causes further headwinds."

"In my view there are areas where we should confront Chinese policies, but there are also significant opportunities to sell into Chinese markets, including financial services and other areas of the economic system. We've got to get that equilibrium correct."

The Treasury chief also confirmed she was cooperating with international partners "on our own critical minerals strategy, so that we are more independent."

Health Service Drug Costs and Investment

Reeves also acknowledged that the cost the NHS pays for medicines could rise as a result of current negotiations with the Trump administration and its drugs companies, in return for reduced taxes and investment.

A number of the biggest global drug companies have said recently that they are either pausing or canceling projects in the UK, with several attributing the modest returns they are receiving.

Recently, the Science Minister said the cost the NHS spends on drugs would have to increase to prevent companies and drug research funding leaving the UK.

The Chancellor informed media: "We have seen because of the cost structure, that medical research, innovative medicines have not been available in the UK in the manner that they are in other European countries."

"The objective is to guarantee that people receiving care from the National Health Service are can receive the top essential drugs in the world. And so we are reviewing all of that, and... aiming to attract increased investment into the UK."