🔗 Share this article

Treasury head Reeves has revealed she is preparing "specific steps to deal with household expense challenges" in next month's financial statement.

In comments to the BBC, she noted that reducing inflation is a shared task of both the administration and the Bank of England.

The UK's price growth is forecast to be the most elevated among the G7 industrialized countries this year and next.

Possible Utility Cost Measures

Sources suggest the government could intervene to reduce utility costs, such as by cutting the current 5% rate of value-added tax applied on energy supplies.

An additional possibility is to lower some of the policy costs presently added to bills.

Fiscal Constraints and Expert Predictions

The administration will obtain the latest assessment from the independent fiscal watchdog, the OBR, on Monday, which will reveal how much space there is for such measures.

The expectation from the majority of analysts is that the Chancellor will have to introduce tax rises or spending cuts in order to adhere to her self-imposed debt limits.

Earlier on the same day, estimates indicated there was a £22bn shortfall for the chancellor to fill, which is at the more modest range of projections.

"There's a collective responsibility between the central bank and the administration to further reduce some of the sources of price increases," Reeves stated to reporters in the US capital, at the conferences of the International Monetary Fund and World Bank.

Tax Pledges and International Issues

While a great deal of the focus has been on likely tax rises, the chancellor said the latest figures from the fiscal watchdog had not changed her commitment to manifesto promises not to raise rates on income tax, sales tax or social security contributions.

She blamed an "unpredictable global environment" with rising international and trade tensions for the fiscal revenue measures, likely to be focused on those "most able to pay."

Global Trade Disputes

Commenting on worries about the United Kingdom's trade ties with the Asian nation she said: "The UK's security interests invariably are paramount."

Last week's announcement by Chinese authorities to increase trade restrictions on rare earths and other materials that are essential for advanced tech production led US President Donald Trump to propose an further 100% tariff on imports from China, raising the risk of an full-scale trade war between the two largest economies.

The US Treasury Secretary described the Chinese decision "economic coercion" and "a global supply chain power grab."

Inquired about accepting the US offer to participate in its dispute with the Asian nation, Reeves said she was "very concerned" by Chinese actions and encouraged the Beijing authorities "not to put up barriers and restrict access."

She said the decision was "damaging for the international commerce and causes additional challenges."

"It is my opinion there are areas where we should challenge China, but there are also important chances to trade with China's economy, including financial services and other sectors of the economy. We've got to maintain that balance appropriate."

The Treasury chief also confirmed she was collaborating with G7 counterparts "regarding our own critical minerals approach, so that we are less reliant."

Health Service Medicine Costs and Funding

Reeves also recognized that the cost the NHS spends on pharmaceuticals could rise as a consequence of ongoing discussions with the US government and its pharmaceutical firms, in return for lower tariffs and investment.

Some of the biggest global pharmaceutical manufacturers have said recently that they are either delaying or canceling projects in the UK, with some attributing the modest returns they are obtaining.

Last month, the Science Minister said the price the NHS pays for drugs would have to go up to prevent businesses and pharmaceutical investment departing from the United Kingdom.

Reeves informed the BBC: "It has been observed as a result of the pricing regime, that clinical trials, innovative medicines have not been provided in the UK in the manner that they are in other EU nations."

"Our aim is to ensure that patients receiving treatment from the National Health Service are can access the best essential drugs in the world. And so we are examining these issues, and... aiming to attract additional funding into Britain."