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Treasury head Rachel Reeves has revealed she is planning "focused action to tackle household expense challenges" in next month's Budget.

During an interview with media outlets, she emphasized that reducing inflation is a collective task of both the administration and the Bank of England.

The United Kingdom's inflation rate is expected to be the highest among the G7 industrialized countries this year and next.

Possible Utility Cost Measures

It is understood the administration could take action to bring down utility costs, for instance by cutting the present 5% rate of VAT applied on energy supplies.

Another option is to lower some of the government charges presently added to bills.

Fiscal Limitations and Analyst Expectations

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

The view from most experts is that the Chancellor will have to introduce higher taxes or budget cuts in order to adhere to her declared debt limits.

Previously on Thursday, estimates suggested there was a £22bn gap for the chancellor to address, which is at the more modest range of expectations.

"There's a shared job between the Bank of England and the government to further reduce some of the sources of inflation," Reeves told reporters in the US capital, at the yearly gatherings of the IMF and global financial institution.

Revenue Pledges and Global Concerns

While much of the focus has been on likely tax increases, the Treasury chief said the latest figures from the OBR had not changed her pledge to manifesto promises not to increase tax levels on earnings tax, sales tax or social security contributions.

She attributed an "uncertain world" with increasing international and trade issues for the Budget revenue measures, probably to be focused on those "with the broadest shoulders."

International Trade Disputes

Addressing concerns about the United Kingdom's trade ties with the Asian nation she said: "The UK's security interests invariably are paramount."

Recent declaration by Chinese authorities to tighten trade restrictions on rare earths and other materials that are crucial for high-technology manufacturing led American leader the US President to threaten an extra 100% tariff on imports from China, raising the possibility of an all-out commercial conflict between the two largest economies.

The American finance chief described China's move "commercial pressure" and "a international production power grab."

Asked about considering the American proposal to participate in its conflict with China, the Chancellor said she was "extremely troubled" by Chinese actions and urged the Chinese government "not to put up barriers and limit trade."

She said the decision was "bad for the international commerce and generates further headwinds."

"I believe there are areas where we should confront China, but there are also important opportunities to trade with China's economy, including banking sector and other sectors of the economy. We've got to get that balance appropriate."

The Treasury chief also stated she was working with other major economies "regarding our own essential resources strategy, so that we are less reliant."

NHS Medicine Pricing and Funding

Reeves also recognized that the cost the National Health Service pays for drugs could go up as a consequence of ongoing negotiations with the US government and its drugs companies, in return for lower tariffs and investment.

Some of the biggest global pharmaceutical manufacturers have said lately that they are either halting or scrapping investments in the United Kingdom, with some blaming the insufficient payments they are getting.

Last month, the Science Minister said the price the NHS pays for medicines would need to rise to stop companies and drug research funding departing from the UK.

The Chancellor told the BBC: "It has been observed due to the cost structure, that drug testing, new drugs have not been offered in the UK in the extent that they are in other European countries."

"The objective is to ensure that individuals getting treatment from the National Health Service are able to obtain the top essential treatments in the world. And so we are looking at these issues, and... aiming to attract increased funding into the UK."