🔗 Share this article

Chancellor Reeves has stated she is planning "focused measures to deal with household expense challenges" in the upcoming financial statement.

Speaking to the BBC, she noted that reducing price rises is a collective task of both the government and the Bank of England.

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

Possible Energy Bill Interventions

Sources suggest the administration could take action to reduce utility costs, such as by reducing the current 5% rate of value-added tax charged on energy supplies.

A further option is to reduce some of the policy costs presently added to bills.

Budgetary Limitations and Expert Predictions

The government will obtain the latest assessment from the official forecaster, the OBR, on the start of the week, which will clarify how much space there is for such actions.

The view from the majority of experts is that the Chancellor will have to announce tax increases or spending cuts in order to adhere to her voluntary fiscal targets.

Previously on Thursday, calculations indicated there was a £22bn deficit for the chancellor to resolve, which is at the lower end of expectations.

"It is a collective responsibility between the Bank of England and the government to continue tackling some of the sources of price increases," Reeves told reporters in Washington, at the yearly gatherings of the IMF and global financial institution.

Tax Pledges and Global Issues

While a great deal of the attention has been on expected tax increases, the chancellor said the latest data from the OBR had not changed her commitment to campaign commitments not to raise tax levels on earnings tax, VAT or social security contributions.

She blamed an "unpredictable global environment" with rising geopolitical and commercial issues for the fiscal revenue measures, likely to be targeted on those "with the broadest shoulders."

International Trade Disputes

Commenting on concerns about the UK's trade ties with China she said: "Our national security always come first."

Last week's announcement by China to strengthen trade restrictions on critical minerals and other materials that are key for high-technology production led American leader the US President to suggest an extra 100% import tax on goods from the Asian country, increasing the prospect of an all-out trade war between the two global powers.

The American finance chief labeled China's move "commercial pressure" and "a global supply chain control attempt."

Inquired about considering the American proposal to join its dispute with China, Reeves said she was "extremely troubled" by China's measures and encouraged the Chinese government "not to put up barriers and limit trade."

She said the move was "harmful for the global economy and creates further obstacles."

"In my view there are sectors where we should challenge Chinese policies, but there are also important prospects to export to China's economy, including financial services and other sectors of the economy. We've got to achieve that equilibrium correct."

The Treasury chief also confirmed she was collaborating with G7 counterparts "regarding our own essential resources strategy, so that we are less reliant."

Health Service Drug Pricing and Funding

Reeves also admitted that the price the NHS pays for drugs could go up as a consequence of current talks with the Trump administration and its drugs companies, in return for reduced taxes and investment.

A number of the world's largest pharmaceutical manufacturers have said recently that they are either delaying or scrapping operations in the United Kingdom, with some attributing the insufficient payments they are obtaining.

Last month, the government science advisor said the price the health service spends on drugs would need to go up to halt firms and drug research funding departing from the United Kingdom.

Reeves informed media: "It has been observed due to the cost structure, that drug testing, innovative medicines have not been offered in the United Kingdom in the extent that they are in other European countries."

"We want to guarantee that individuals receiving treatment from the National Health Service are able to obtain the best essential drugs in the globe. And so we are reviewing these issues, and... seeking to obtain more investment into Britain."