🔗 Share this article

Treasury head Reeves has stated she is planning "focused action to address household expense issues" in the forthcoming Budget.

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

The UK's inflation rate is forecast to be the most elevated among the G7 developed nations this year and next.

Potential Energy Cost Measures

It is understood the government could take action to reduce energy bills, such as by cutting the present 5% level of value-added tax charged on energy.

A further option is to reduce some of the government charges presently added to bills.

Fiscal Constraints and Expert Predictions

The government will receive the next report from the official forecaster, the Office for Budget Responsibility, on Monday, which will clarify how much scope there is for these actions.

The expectation from most analysts is that the Chancellor will have to declare tax increases or spending cuts in order to meet her voluntary borrowing rules.

Previously on Thursday, estimates suggested there was a twenty-two billion pound deficit for the Treasury chief to fill, which is at the lower end of projections.

"It is a shared job between the Bank of England and the government to continue tackling some of the sources of inflation," the Chancellor stated to reporters in the US capital, at the annual meetings of the International Monetary Fund and World Bank.

Revenue Pledges and Global Concerns

While much of the focus has been on probable tax increases, the Treasury chief said the latest figures from the fiscal watchdog had not altered her commitment to campaign commitments not to increase rates on income tax, VAT or National Insurance.

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

International Economic Tensions

Commenting on concerns about the United Kingdom's commercial links with China she said: "The UK's national security invariably take priority."

Last week's declaration by China to increase trade restrictions on rare earths and other materials that are key for advanced tech manufacturing led US President Donald Trump to threaten an extra 100% tariff on goods from China, raising the risk of an full-scale commercial conflict between the two economic giants.

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

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

She said the decision was "harmful for the international commerce and creates additional challenges."

"In my view there are sectors where we must confront China, but there are also important chances to sell into Chinese markets, including banking sector and other sectors of the economy. We've got to achieve that balance right."

The Treasury chief also confirmed she was cooperating with G7 counterparts "on our own critical minerals strategy, so that we are more independent."

NHS Drug Pricing and Investment

Reeves also recognized that the cost the NHS pays for drugs could increase as a consequence of ongoing negotiations with the US government and its drugs companies, in return for lower tariffs and capital.

A number of the biggest global drug companies have said recently that they are either delaying or abandoning investments in the United Kingdom, with some blaming the modest returns they are getting.

Recently, the Science Minister said the cost the health service pays for drugs would have to go up to halt companies and drug research funding leaving the United Kingdom.

The Chancellor stated to media: "It has been observed as a result of the payment system, that medical research, new drugs have not been provided in the UK in the way that they are in other continental states."

"We want to make sure that individuals getting care from the National Health Service are can obtain the finest life-saving drugs in the globe. And so we are examining these issues, and... seeking to attract more funding into Britain."