🔗 Share this article

Chancellor Reeves has stated she is planning "targeted measures to deal with household expense pressures" in next month's financial statement.

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

The UK's price growth is expected to be the highest among the G7 industrialized countries this calendar year and the following year.

Possible Utility Bill Interventions

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

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

Budgetary Constraints and Expert Expectations

The government will receive the next draft from the independent fiscal watchdog, the Office for Budget Responsibility, on the start of the week, which will show how much room there is for such actions.

The view from the majority of experts is that Reeves will have to declare tax rises or expenditure reductions in order to meet her declared debt limits.

Earlier on Thursday, analysis indicated there was a twenty-two billion pound gap for the Treasury chief to resolve, which is at the lower end of expectations.

"It is a collective task between the Bank of England and the government to bear down further on some of the drivers of inflation," Reeves told the BBC in the US capital, at the yearly gatherings of the International Monetary Fund and global financial institution.

Revenue Pledges and International Issues

While a great deal of the attention has been on likely tax increases, the chancellor said the latest data from the fiscal watchdog had not changed her commitment to election pledges not to increase rates on earnings tax, VAT or social security contributions.

She attributed an "unpredictable global environment" with increasing geopolitical and commercial issues for the Budget tax moves, probably to be directed on those "with the broadest shoulders."

Global Trade Disputes

Addressing worries about the UK's trade ties with China she said: "The UK's national security invariably are paramount."

Last week's statement by Chinese authorities to increase export controls on critical minerals and other materials that are key for advanced tech production led American leader Donald Trump to suggest an further 100% import tax on goods from the Asian country, raising the risk of an all-out commercial conflict between the two global powers.

The US Treasury Secretary described China's move "economic coercion" and "a international production power grab."

Questioned on accepting the US offer to join its battle with the Asian nation, Reeves said she was "deeply worried" by Chinese actions and urged the Beijing authorities "to avoid restrictions and restrict access."

She said the move was "harmful for the global economy and creates additional headwinds."

"In my view there are areas where we should address Chinese policies, but there are also important prospects to trade with China's economy, including financial services and other areas of the economic system. We've got to achieve that balance right."

The chancellor also stated she was collaborating with international partners "on our own essential resources approach, so that we are reduced dependence."

NHS Drug Pricing and Funding

Reeves also recognized that the price the NHS spends on pharmaceuticals could go up as a result of current discussions with the US government and its drugs companies, in exchange for lower tariffs and capital.

A number of the biggest global pharmaceutical manufacturers have said recently that they are either halting or scrapping investments in the United Kingdom, with several blaming the modest returns they are getting.

Last month, the government science advisor said the cost the NHS spends on medicines would must go up to prevent firms and drug research funding departing from the UK.

Reeves stated to media: "It has been observed because of the cost structure, that clinical trials, recent pharmaceuticals have not been provided in the UK in the manner that they are in other European countries."

"The objective is to ensure that people receiving care from the National Health Service are able to access the best critical drugs in the world. And so we are looking at all of that, and... looking to obtain additional funding into Britain."