🔗 Share this article

Chancellor Rachel Reeves has stated she is preparing "focused steps to address household expense pressures" in next month's financial statement.

In comments to media outlets, she stated that reducing price rises is a shared duty of both the government and the Bank of England.

The United Kingdom's price growth is expected to be the highest among the Group of Seven advanced economies this year and the following year.

Possible Utility Bill Measures

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

A further option is to cut some of the policy costs presently included in bills.

Budgetary Limitations and Analyst Predictions

The government will receive the next assessment from the official forecaster, the OBR, on Monday, which will reveal how much room there is for these measures.

The expectation from most analysts is that Reeves will have to declare tax increases or budget cuts in order to adhere to her voluntary borrowing rules.

Earlier on Thursday, estimates suggested there was a £22 billion deficit for the Treasury chief to resolve, which is at the more modest range of expectations.

"It is a collective responsibility between the Bank of England and the government to bear down further on some of the causes of price increases," Reeves informed the BBC in the US capital, at the conferences of the International Monetary Fund and World Bank.

Revenue Pledges and Global Issues

While a great deal of the focus has been on expected tax increases, the Treasury chief said the most recent data from the fiscal watchdog had not altered her vow to campaign commitments not to raise tax levels on earnings tax, VAT or National Insurance.

She attributed an "uncertain world" with rising geopolitical and trade tensions for the Budget revenue measures, likely to be targeted on those "wealthiest."

Global Economic Tensions

Referring to apprehensions about the UK's economic relations with China she said: "Our security interests invariably are paramount."

Last week's declaration by Chinese authorities to strengthen export controls on rare earths and other resources that are crucial for high-technology production led American leader Donald Trump to suggest an additional 100% import tax on goods from China, raising the risk of an all-out trade war between the two economic giants.

The American finance chief described the Chinese decision "commercial pressure" and "a international production control attempt."

Questioned on accepting the American proposal to participate in its battle with the Asian nation, Reeves said she was "deeply worried" by China's measures and encouraged the Chinese government "to avoid restrictions and restrict access."

She said the action was "harmful for the world economy and generates further challenges."

"It is my opinion there are sectors where we should challenge China, but there are also significant chances to sell into China's economy, including banking sector and other areas of the economy. We've got to maintain that balance correct."

The chancellor also stated she was working with other major economies "on our own critical minerals approach, so that we are less reliant."

Health Service Drug Pricing and Investment

Reeves also recognized that the cost the National Health Service spends on drugs could increase as a result of ongoing negotiations with the US government and its pharmaceutical firms, in return for reduced taxes and funding.

Some of the biggest global pharmaceutical manufacturers have said in recent statements that they are either halting or canceling investments in the United Kingdom, with some blaming the insufficient payments they are obtaining.

Last month, the Science Minister said the price the NHS spends on drugs would have to go up to halt firms and drug research funding leaving the UK.

The Chancellor informed the BBC: "We have seen as a result of the payment system, that clinical trials, innovative medicines have not been provided in the United Kingdom in the extent that they are in other EU nations."

"We want to ensure that patients getting care from the NHS are able to obtain the finest life-saving treatments in the globe. And so we are looking at this situation, and... aiming to secure additional funding into Britain."