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Treasury head Rachel Reeves has stated she is preparing "targeted measures to tackle cost of living challenges" in next month's Budget.

During an interview with the BBC, she noted that reducing price rises is a shared responsibility of both the government and the Bank of England.

The UK's price growth is forecast to be the highest among the Group of Seven industrialized countries this year and the following year.

Possible Energy Bill Interventions

It is understood the administration could intervene to reduce energy bills, such as by cutting the current 5% rate of VAT applied on energy supplies.

A further approach is to lower some of the policy costs currently added to bills.

Budgetary Constraints and Analyst Predictions

The government will receive the next assessment from the independent fiscal watchdog, the Office for Budget Responsibility, on Monday, which will show how much space there is for such measures.

The expectation from the majority of economists is that Reeves will have to declare tax increases or spending cuts in order to adhere to her self-imposed fiscal targets.

Previously on the same day, estimates indicated there was a £22bn deficit for the Treasury chief to fill, which is at the lower end of forecasts.

"There's a joint task between the central bank and the administration to further reduce some of the causes of inflation," Reeves informed reporters in Washington, at the annual meetings of the International Monetary Fund and World Bank.

Tax Commitments and Global Concerns

While a great deal of the attention has been on likely tax rises, the Treasury chief said the latest figures from the fiscal watchdog had not changed her vow to election pledges not to increase rates on income tax, sales tax or social security contributions.

She blamed an "uncertain world" with rising geopolitical and commercial issues for the Budget revenue measures, likely to be focused on those "with the broadest shoulders."

Global Trade Tensions

Referring to worries about the UK's commercial links with China she said: "The UK's national security always come first."

Last week's statement by China to strengthen trade restrictions on rare earths and other materials that are key for high-technology manufacturing led American leader Donald Trump to suggest an further 100% tariff on imports from the Asian country, raising the prospect of an full-scale trade war between the two global powers.

The US Treasury Secretary called the Chinese move "commercial pressure" and "a global supply chain control attempt."

Questioned on considering the American proposal to participate in its battle with China, the Chancellor said she was "extremely troubled" by China's actions and called on the Chinese government "not to put up barriers and limit trade."

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

"It is my opinion there are fields where we must address China, but there are also significant chances to sell into China's economy, including financial services and other sectors of the economic system. We've got to maintain that balance appropriate."

The Treasury chief also affirmed she was cooperating with international partners "on our own critical minerals strategy, so that we are reduced dependence."

Health Service Drug Pricing and Funding

The Chancellor also acknowledged that the cost the National Health Service pays for medicines could increase as a consequence of current talks with the US government and its drugs companies, in exchange for lower tariffs and capital.

Some of the world's largest drug companies have said lately that they are either delaying or scrapping investments in the UK, with several blaming the low prices they are receiving.

Last month, the government science advisor said the cost the NHS spends on medicines would have to increase to halt firms and drug research funding leaving the UK.

Reeves told the BBC: "We have seen because of the cost structure, that drug testing, innovative medicines have not been available in the United Kingdom in the extent that they are in other EU nations."

"The objective is to make sure that individuals receiving treatment from the National Health Service are able to receive the top essential drugs in the globe. And so we are examining these issues, and... seeking to secure additional investment into Britain."