🔗 Share this article

Chancellor Rachel Reeves has revealed she is preparing "focused measures to address household expense pressures" in the upcoming financial statement.

During an interview with the BBC, she stated that curbing price rises is a joint responsibility of both the government and the Bank of England.

The UK's inflation rate is forecast to be the highest among the Group of Seven developed nations this year and next.

Potential Utility Bill Measures

Reports indicate the government could intervene to reduce utility costs, such as by cutting the current 5% rate of value-added tax applied on energy supplies.

An additional possibility is to lower some of the government charges presently included in bills.

Budgetary Limitations and Expert Predictions

The administration will receive the next draft from the independent fiscal watchdog, the OBR, on the start of the week, which will reveal how much scope there is for such measures.

The consensus from the majority of analysts is that the Chancellor will have to introduce tax increases or budget cuts in order to adhere to her declared debt limits.

Earlier on the same day, estimates indicated there was a twenty-two billion pound deficit for the chancellor to resolve, which is at the lower end of forecasts.

"There's a joint responsibility between the central bank and the administration to continue tackling some of the sources of inflation," Reeves told the BBC in Washington, at the annual meetings of the International Monetary Fund and global financial institution.

Tax Pledges and International Concerns

While much of the focus has been on expected tax rises, the chancellor said the latest figures from the fiscal watchdog had not altered her commitment to election pledges not to raise tax levels on income tax, VAT or National Insurance.

She blamed an "unpredictable world" with growing international and trade concerns for the fiscal tax moves, likely to be targeted on those "most able to pay."

Global Economic Tensions

Referring to apprehensions about the UK's commercial links with China she said: "Our national security always are paramount."

Last week's declaration by Chinese authorities to tighten trade restrictions on rare earths and other materials that are key for advanced tech manufacturing led American leader the US President to propose an extra 100% tariff on goods from the Asian country, increasing the prospect of an all-out trade war between the two economic giants.

The US Treasury Secretary called the Chinese move "economic coercion" and "a global supply chain power grab."

Asked about considering the US offer to participate in its battle with China, the Chancellor said she was "very concerned" by Chinese actions and encouraged the Beijing authorities "not to put up barriers and limit trade."

She said the move was "harmful for the international commerce and creates further challenges."

"It is my opinion there are fields where we must confront Chinese policies, but there are also important chances to export to China's economy, including banking sector and other areas of the economic system. We've got to achieve that equilibrium correct."

The Treasury chief also stated she was collaborating with other major economies "on our own critical minerals plan, so that we are less reliant."

Health Service Drug Pricing and Investment

The Chancellor also acknowledged that the price the National Health Service pays for pharmaceuticals could go up as a consequence of current talks with the Trump administration and its drugs companies, in return for lower tariffs and capital.

Some of the world's largest pharmaceutical manufacturers have said in recent statements that they are either halting or abandoning operations in the United Kingdom, with some attributing the modest returns they are obtaining.

Last month, the Science Minister said the price the NHS pays for medicines would must go up to halt firms and drug research funding leaving the UK.

Reeves informed the BBC: "It has been observed as a result of the pricing regime, that clinical trials, recent pharmaceuticals have not been available in the UK in the manner that they are in other EU nations."

"We want to make sure that individuals getting care from the National Health Service are able to receive the top critical treatments in the world. And so we are looking at all of that, and... aiming to secure more capital into the UK."