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Treasury head Rachel Reeves has announced she is preparing "targeted measures to address cost of living issues" in the upcoming financial statement.

During an interview with the BBC, she noted that curbing price rises is a shared task of both the government and the Bank of England.

The United Kingdom's price growth is forecast to be the most elevated among the G7 industrialized countries this year and next.

Possible Utility Cost Interventions

It is understood the government could take action to bring down energy bills, for example by slashing the current 5% level of VAT charged on energy.

An additional option is to lower some of the policy costs currently included in bills.

Budgetary Constraints and Analyst Expectations

The government will obtain the next report from the official forecaster, the OBR, on Monday, which will clarify how much room there is for such measures.

The consensus from the majority of analysts is that the Chancellor will have to introduce tax increases or expenditure reductions in order to adhere to her declared borrowing rules.

Previously on the same day, calculations indicated there was a £22bn gap for the Treasury chief to fill, which is at the more modest range of forecasts.

"It is a collective task between the central bank and the government to bear down further on some of the causes of price increases," Reeves told reporters in Washington, at the annual meetings of the International Monetary Fund and global financial institution.

Tax Pledges and International Issues

While much of the focus has been on expected tax increases, the Treasury chief said the most recent figures from the OBR had not altered her pledge to manifesto promises not to raise tax levels on income tax, VAT or social security contributions.

She attributed an "unpredictable world" with increasing international and commercial tensions for the fiscal revenue measures, probably to be focused on those "most able to pay."

International Economic Disputes

Commenting on worries about the UK's commercial links with the Asian nation she said: "Our security interests invariably come first."

Last week's statement by China to tighten export controls on critical minerals and other materials that are essential for advanced tech manufacturing led US President Donald Trump to propose an additional 100% import tax on goods from the Asian country, increasing the risk of an full-scale trade war between the two global powers.

The American finance chief called China's move "commercial pressure" and "a global supply chain power grab."

Questioned on considering the American proposal to participate in its dispute with China, the Chancellor said she was "extremely troubled" by Chinese measures and called on the Beijing authorities "not to put up barriers and limit trade."

She said the action was "damaging for the international commerce and causes additional headwinds."

"It is my opinion there are areas where we should challenge China, but there are also significant prospects to export to China's economy, including banking sector and other sectors of the economic system. We've got to achieve that balance right."

The Treasury chief also confirmed she was working with international partners "regarding our own essential resources strategy, so that we are more independent."

Health Service Medicine Costs and Investment

The Chancellor also acknowledged that the cost the NHS spends on drugs could increase as a consequence of current negotiations with the Trump administration and its pharmaceutical firms, in return for reduced taxes and capital.

A number of the world's largest drug companies have said lately that they are either pausing or canceling operations in the United Kingdom, with several blaming the low prices they are getting.

Recently, the government science advisor said the cost the NHS pays for medicines would need to go up to halt companies and pharmaceutical investment departing from the United Kingdom.

Reeves informed the BBC: "It has been observed due to the pricing regime, that drug testing, recent pharmaceuticals have not been available in the United Kingdom in the manner that they are in other European countries."

"We want to ensure that individuals receiving treatment from the NHS are can access the best life-saving treatments in the world. And so we are reviewing this situation, and... looking to obtain increased funding into Britain."