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Treasury head Rachel Reeves has stated she is planning "focused action to address cost of living challenges" in the upcoming Budget.

Speaking to the BBC, she stated that reducing price rises is a collective duty of both the administration and the Bank of England.

The UK's inflation rate is forecast to be the highest among the Group of Seven advanced economies this year and the following year.

Possible Energy Bill Interventions

It is understood the government could take action to lower energy bills, for instance by cutting the present 5% rate of value-added tax charged on energy.

A further option is to cut some of the government charges currently added to household expenses.

Budgetary Constraints and Analyst Predictions

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

The expectation from most experts is that the Chancellor will have to introduce tax rises or spending cuts in order to fulfill her voluntary borrowing rules.

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

"It is a shared responsibility between the central bank and the government to continue tackling some of the sources of inflation," Reeves stated to the BBC in the US capital, at the annual meetings of the International Monetary Fund and global financial institution.

Tax Commitments and Global Issues

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

She blamed an "unpredictable global environment" with rising international and commercial tensions for the Budget revenue measures, probably to be focused on those "with the broadest shoulders."

International Trade Tensions

Commenting on apprehensions about the UK's trade ties with China she said: "The UK's security interests invariably are paramount."

Recent statement by Chinese authorities to tighten export controls on critical minerals and other resources that are essential for advanced tech production led US President the US President to propose an further 100% import tax on imports from the Asian country, raising the possibility of an full-scale trade war between the two economic giants.

The US Treasury Secretary labeled the Chinese decision "economic coercion" and "a global supply chain control attempt."

Asked about considering the American proposal to join its dispute with the Asian nation, the Chancellor said she was "very concerned" by China's actions and urged the Beijing authorities "to avoid restrictions and limit trade."

She said the move was "harmful for the world economy and creates additional challenges."

"I believe there are areas where we must confront China, but there are also significant chances to sell into China's economy, including banking sector and other sectors of the economy. We've got to achieve that balance appropriate."

The Treasury chief also stated she was working with G7 counterparts "regarding our own essential resources strategy, so that we are reduced dependence."

Health Service Drug Costs and Investment

Reeves also acknowledged that the price the National Health Service spends on drugs could go up as a result of ongoing discussions with the US government and its drugs companies, in return for lower tariffs and funding.

A number of the world's largest pharmaceutical manufacturers have said recently that they are either delaying or abandoning operations in the United Kingdom, with several blaming the insufficient payments they are receiving.

Last month, the Science Minister said the price the health service spends on drugs would need to rise to halt companies and drug research funding leaving the United Kingdom.

The Chancellor stated to media: "It has been observed due to the pricing regime, that medical research, recent pharmaceuticals have not been provided in the UK in the manner that they are in other European countries."

"We want to ensure that people getting treatment from the NHS are able to obtain the top critical treatments in the world. And so we are reviewing these issues, and... aiming to secure increased capital into the UK."