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Treasury head Rachel Reeves has announced she is preparing "targeted action to tackle household expense issues" in the forthcoming financial statement.

In comments to the BBC, she emphasized that reducing inflation is a joint duty of both the government and the Bank of England.

The UK's inflation rate is expected to be the highest among the G7 industrialized countries this calendar year and the following year.

Potential Energy Bill Interventions

Sources suggest the government could intervene to bring down utility costs, for example by cutting the current 5% rate of VAT applied on energy.

A further approach is to cut some of the policy costs currently included in bills.

Budgetary Constraints and Expert Expectations

The government will receive the latest draft from the official forecaster, the OBR, on the start of the week, which will show how much scope there is for such measures.

The view from the majority of economists is that Reeves will have to introduce tax increases or budget cuts in order to meet her self-imposed debt limits.

Previously on Thursday, analysis suggested there was a £22bn shortfall for the Treasury chief to resolve, which is at the lower end of forecasts.

"There's a shared task between the Bank of England and the government to continue tackling some of the sources of inflation," Reeves told reporters in the US capital, at the annual meetings of the International Monetary Fund and global financial institution.

Revenue Pledges and International Concerns

While much of the attention has been on expected tax rises, the Treasury chief said the most recent data from the OBR had not changed her commitment to campaign commitments not to raise tax levels on income tax, VAT or National Insurance.

She attributed an "uncertain world" with increasing international and commercial concerns for the fiscal revenue measures, likely to be directed on those "with the broadest shoulders."

International Economic Disputes

Commenting on concerns about the UK's trade ties with the Asian nation she said: "Our national security invariably are paramount."

Last week's declaration by Chinese authorities to tighten export controls on rare earths and other materials that are essential for advanced tech manufacturing led US President the US President to propose an additional 100% tariff on imports from China, raising the prospect of an full-scale trade war between the two economic giants.

The US Treasury Secretary described China's move "commercial pressure" and "a international production control attempt."

Inquired about considering the US offer to join its battle with China, the Chancellor said she was "very concerned" by China's actions and called on the Beijing authorities "to avoid restrictions and limit trade."

She said the decision was "damaging for the international commerce and generates further obstacles."

"It is my opinion there are areas where we should challenge China, but there are also valuable chances to export to China's economy, including banking sector and other areas of the economy. We've got to maintain that equilibrium appropriate."

The chancellor also affirmed she was working with international partners "on our own essential resources strategy, so that we are reduced dependence."

NHS Medicine Pricing and Investment

The Chancellor also acknowledged that the cost the National Health Service spends on medicines could increase as a result of ongoing talks with the Trump administration and its drugs companies, in exchange for reduced taxes and investment.

A number of the biggest global pharmaceutical manufacturers have said in recent statements that they are either pausing or canceling operations in the United Kingdom, with some blaming the modest returns they are getting.

Recently, the government science advisor said the price the NHS pays for medicines would need to rise to halt companies and drug research funding departing from the United Kingdom.

Reeves told media: "We have seen as a result of the cost structure, that medical research, innovative medicines have not been provided in the United Kingdom in the manner that they are in other continental states."

"Our aim is to guarantee that patients getting treatment from the NHS are able to receive the best life-saving drugs in the world. And so we are examining all of that, and... seeking to attract additional capital into the UK."