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Treasury head Rachel Reeves has revealed she is preparing "focused action to address cost of living pressures" in the upcoming financial statement.

Speaking to media outlets, she noted that reducing inflation is a collective duty of both the government and the central bank.

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

Potential Energy Cost Interventions

Sources suggest the government could intervene to bring down energy bills, such as by cutting the current 5% rate of value-added tax charged on energy supplies.

An additional possibility is to reduce some of the policy costs presently added to bills.

Budgetary Constraints and Analyst Expectations

The government will obtain the latest assessment from the official forecaster, the Office for Budget Responsibility, on the start of the week, which will clarify how much space there is for such actions.

The view from most analysts is that Reeves will have to announce tax increases or expenditure reductions in order to meet her self-imposed debt limits.

Previously on Thursday, estimates indicated there was a £22bn deficit for the chancellor to fill, which is at the more modest range of forecasts.

"It is a joint task between the Bank of England and the administration to further reduce some of the drivers of price increases," the Chancellor informed the BBC in Washington, at the yearly gatherings of the International Monetary Fund and World Bank.

Tax Pledges and International Issues

While much of the attention has been on probable tax increases, the chancellor said the latest data from the fiscal watchdog had not altered her vow to election pledges not to increase tax levels on income tax, sales tax or social security contributions.

She attributed an "uncertain global environment" with rising international and trade issues for the fiscal revenue measures, likely to be directed on those "wealthiest."

International Trade Disputes

Referring to concerns about the UK's economic relations with China she said: "The UK's security interests always take priority."

Last week's announcement by China to increase trade restrictions on rare earths and other resources that are essential for advanced tech production led US President the US President to suggest an additional 100% import tax on imports from China, raising the risk of an full-scale trade war between the two global powers.

The US Treasury Secretary described China's move "economic coercion" and "a global supply chain power grab."

Questioned on considering the US offer to participate in its battle with China, Reeves said she was "very concerned" by China's actions and urged the Beijing authorities "to avoid restrictions and restrict access."

She said the move was "bad for the world economy and creates further challenges."

"I believe there are fields where we need to address China, but there are also important prospects to trade with Chinese markets, including banking sector and other areas of the economic system. We've got to achieve that equilibrium appropriate."

The Treasury chief also confirmed she was collaborating with G7 counterparts "regarding our own essential resources plan, so that we are less reliant."

NHS Medicine Pricing and Funding

Reeves also acknowledged that the price the NHS pays for drugs could increase as a result of current negotiations with the US government and its drugs companies, in return for lower tariffs and capital.

A number of the world's largest drug companies have said recently that they are either pausing or abandoning investments in the United Kingdom, with several blaming the insufficient payments they are obtaining.

Recently, the Science Minister said the price the NHS spends on drugs would must rise to stop companies and pharmaceutical investment leaving the United Kingdom.

Reeves told media: "We have seen because of the pricing regime, that medical research, recent pharmaceuticals have not been provided in the United Kingdom in the manner that they are in other continental states."

"Our aim is to guarantee that people receiving treatment from the NHS are able to receive the best critical drugs in the world. And so we are looking at this situation, and... aiming to obtain increased funding into Britain."