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Chancellor Rachel Reeves has announced she is preparing "focused steps to tackle cost of living issues" in next month's financial statement.

During an interview with media outlets, she noted that reducing inflation is a collective duty of both the government and the Bank of England.

The UK's inflation rate is expected to be the highest among the Group of Seven industrialized countries this year and next.

Possible Energy Cost Interventions

It is understood the administration could take action to bring down utility costs, such as by reducing the present 5% level of VAT charged on energy supplies.

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

Fiscal Constraints and Expert Predictions

The administration will receive the latest assessment from the independent fiscal watchdog, the Office for Budget Responsibility, on the start of the week, which will show how much scope there is for these measures.

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

Earlier on the same day, estimates indicated there was a £22bn deficit for the chancellor to fill, which is at the lower end of expectations.

"There's a shared task between the Bank of England and the government to continue tackling some of the drivers of inflation," the Chancellor told reporters in Washington, at the annual meetings of the IMF and World Bank.

Tax Commitments and Global Concerns

While much of the attention has been on likely tax increases, the chancellor said the most recent figures from the fiscal watchdog had not altered her pledge to manifesto promises not to increase tax levels on earnings tax, VAT or social security contributions.

She attributed an "unpredictable world" with increasing geopolitical and commercial issues for the fiscal revenue measures, likely to be focused on those "with the broadest shoulders."

International Trade Tensions

Commenting on concerns about the United Kingdom's trade ties with the Asian nation she said: "Our national security invariably take priority."

Recent announcement by China to increase export controls on critical minerals and other materials that are essential for advanced tech manufacturing led American leader the US President to suggest an extra 100% tariff on goods from the Asian country, increasing the possibility of an all-out commercial conflict between the two global powers.

The American finance chief called the Chinese action "commercial pressure" and "a global supply chain control attempt."

Inquired about considering the US offer to participate in its conflict with the Asian nation, the Chancellor said she was "very concerned" by China's actions and encouraged the Beijing authorities "to avoid restrictions and limit trade."

She said the move was "damaging for the global economy and causes additional obstacles."

"In my view there are fields where we must challenge Chinese policies, but there are also valuable opportunities to trade with Chinese markets, including banking sector and other areas of the economy. We've got to achieve that balance correct."

The chancellor also confirmed she was working with G7 counterparts "on our own critical minerals strategy, so that we are less reliant."

Health Service Medicine Pricing and Funding

Reeves also admitted that the price the National Health Service spends on pharmaceuticals could rise as a consequence of ongoing discussions with the Trump administration and its pharmaceutical firms, in exchange for reduced taxes and capital.

A number of the biggest global pharmaceutical manufacturers have said in recent statements that they are either delaying or abandoning operations in the UK, with some blaming the insufficient payments they are obtaining.

Recently, the Science Minister said the cost the health service pays for drugs would have to increase to prevent firms and drug research funding leaving the UK.

Reeves stated to the BBC: "It has been observed as a result of the payment system, that medical research, recent pharmaceuticals have not been provided in the United Kingdom in the way that they are in other continental states."

"We want to make sure that people receiving care from the National Health Service are can receive the top critical treatments in the globe. And so we are examining these issues, and... aiming to obtain increased investment into Britain."