🔗 Share this article

Chancellor Rachel Reeves has revealed she is preparing "focused action to tackle household expense pressures" in the forthcoming financial statement.

Speaking to the BBC, she noted that reducing price rises is a joint task of both the government and the Bank of England.

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

Potential Utility Bill Interventions

It is understood the government could take action to lower utility costs, such as by slashing the current 5% level of value-added tax applied on energy supplies.

Another option is to cut some of the regulatory levies currently added to bills.

Budgetary Constraints and Analyst Expectations

The government will obtain the latest assessment from the official forecaster, the OBR, on Monday, which will show how much space there is for these actions.

The view from the majority of experts is that the Chancellor will have to introduce tax increases or expenditure reductions in order to meet her declared debt limits.

Previously on Thursday, calculations indicated there was a £22 billion shortfall for the chancellor to address, which is at the more modest range of projections.

"There's a collective job between the Bank of England and the administration to continue tackling some of the drivers of price increases," Reeves informed the BBC in Washington, at the yearly gatherings of the International Monetary Fund and World Bank.

Revenue Pledges and Global Concerns

While a great deal of the focus has been on expected tax increases, the Treasury chief said the most recent information from the OBR had not changed her commitment to manifesto promises not to raise rates on income tax, sales tax or National Insurance.

She blamed an "unpredictable global environment" with growing geopolitical and trade concerns for the fiscal revenue measures, probably to be directed on those "wealthiest."

International Economic Disputes

Addressing concerns about the United Kingdom's economic relations with the Asian nation she said: "The UK's security interests invariably take priority."

Last week's statement by Chinese authorities to increase export controls on critical minerals and other resources that are essential for high-technology production led American leader Donald Trump to threaten an further 100% import tax on goods from China, increasing the possibility of an all-out trade war between the two largest economies.

The US Treasury Secretary labeled the Chinese decision "economic coercion" and "a global supply chain control attempt."

Asked about considering the US offer to participate in its conflict with China, Reeves said she was "deeply worried" by Chinese measures and called on the Chinese government "to avoid restrictions and restrict access."

She said the move was "damaging for the world economy and generates additional challenges."

"I believe there are sectors where we must confront Chinese policies, but there are also valuable chances to sell into China's economy, including banking sector and other sectors of the economic system. We've got to maintain that equilibrium correct."

The Treasury chief also stated she was working with G7 counterparts "on our own essential resources approach, so that we are less reliant."

Health Service Drug Pricing and Investment

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

Some of the biggest global pharmaceutical manufacturers have said recently that they are either halting or scrapping operations in the UK, with several attributing the modest returns they are receiving.

Recently, the government science advisor said the price the NHS spends on medicines would need to increase to stop firms and pharmaceutical investment leaving the United Kingdom.

Reeves informed media: "It has been observed due to the pricing regime, that drug testing, innovative medicines have not been offered in the UK in the way that they are in other continental states."

"Our aim is to make sure that individuals receiving treatment from the NHS are able to access the finest life-saving medicines in the globe. And so we are looking at all of that, and... aiming to obtain increased capital into Britain."