🔗 Share this article

Treasury head Reeves has revealed she is planning "focused steps to tackle household expense challenges" in next month's financial statement.

Speaking to the BBC, she noted that curbing inflation 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 calendar year and next.

Potential Energy Bill Measures

It is understood the government could intervene to reduce utility costs, for example by cutting the current 5% level of value-added tax charged on energy.

Another possibility is to cut some of the government charges currently included in household expenses.

Budgetary Limitations and Expert Predictions

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

The expectation from the majority of economists is that the Chancellor will have to declare tax increases or spending cuts in order to adhere to her voluntary borrowing rules.

Previously on Thursday, calculations suggested there was a £22 billion deficit for the chancellor to address, which is at the lower end of projections.

"It is a shared task between the central bank and the government to continue tackling some of the drivers of inflation," the Chancellor informed reporters in Washington, at the conferences of the International Monetary Fund and global financial institution.

Revenue Pledges and International Concerns

While a great deal of the attention has been on expected tax rises, the Treasury chief said the most recent data from the OBR had not altered her vow to election pledges not to increase rates on income tax, sales tax or National Insurance.

She blamed an "unpredictable world" with growing geopolitical and trade issues for the Budget tax moves, likely to be directed on those "wealthiest."

Global Trade Tensions

Commenting on concerns about the UK's economic relations with China she said: "Our national security always are paramount."

Recent statement by Chinese authorities to strengthen export controls on rare earths and other materials that are essential for advanced tech production led US President Donald Trump to propose an additional 100% import tax on goods from the Asian country, raising the risk of an all-out trade war between the two economic giants.

The US Treasury Secretary labeled the Chinese action "commercial pressure" and "a international production control attempt."

Questioned on accepting the American proposal to join its battle with China, Reeves said she was "extremely troubled" by Chinese measures and encouraged the Chinese government "to avoid restrictions and restrict access."

She said the action was "bad for the global economy and generates additional challenges."

"In my view there are areas where we should confront Chinese policies, but there are also important chances to trade with Chinese markets, including financial services and other areas of the economy. We've got to achieve that balance correct."

The Treasury chief also confirmed she was working with G7 counterparts "regarding our own critical minerals approach, so that we are reduced dependence."

Health Service Medicine Pricing and Funding

Reeves also recognized that the cost the National Health Service pays for medicines could increase as a result of ongoing talks with the US government and its drugs companies, in exchange for reduced taxes and funding.

A number of the biggest global pharmaceutical manufacturers have said lately that they are either pausing or canceling investments in the United Kingdom, with some attributing the low prices they are receiving.

Last month, the Science Minister said the price the health service pays for drugs would must rise to stop firms and drug research funding departing from the United Kingdom.

Reeves stated to media: "It has been observed because of the payment system, that clinical trials, new drugs have not been offered in the United Kingdom in the way that they are in other EU nations."

"The objective is to guarantee that individuals receiving care from the National Health Service are can obtain the finest critical drugs in the globe. And so we are examining these issues, and... looking to obtain additional capital into the UK."