🔗 Share this article

Treasury head Reeves has announced she is preparing "targeted action to tackle household expense challenges" in the upcoming financial statement.

In comments to media outlets, she stated that curbing inflation is a joint responsibility of both the administration and the Bank of England.

The UK's inflation rate is expected to be the most elevated among the Group of Seven developed nations this calendar year and the following year.

Possible Energy Cost Measures

Sources suggest the administration could take action to lower energy bills, for example by reducing the present 5% level of value-added tax charged on energy supplies.

A further option is to cut some of the regulatory levies currently included in household expenses.

Fiscal Constraints and Expert Predictions

The administration will obtain the next draft from the official forecaster, the Office for Budget Responsibility, on Monday, which will reveal how much scope there is for these measures.

The consensus from most analysts is that the Chancellor will have to introduce higher taxes or spending cuts in order to adhere to her self-imposed debt limits.

Previously on the same day, analysis showed there was a £22 billion shortfall for the Treasury chief to fill, which is at the lower end of projections.

"There's a shared responsibility between the Bank of England and the administration to bear down further on some of the causes of price increases," Reeves told the BBC in Washington, at the annual meetings of the IMF and global financial institution.

Tax Pledges and International Concerns

While much of the focus has been on expected tax rises, the Treasury chief said the latest figures from the fiscal watchdog had not altered her vow to campaign commitments not to increase tax levels on earnings tax, VAT or National Insurance.

She attributed an "unpredictable world" with growing geopolitical and trade tensions for the fiscal tax moves, probably to be directed on those "wealthiest."

Global Trade Disputes

Referring to worries about the UK's economic relations with the Asian nation she said: "The UK's security interests always are paramount."

Recent statement by China to increase export controls on critical minerals and other resources that are crucial for high-technology manufacturing led American leader the US President to propose an further 100% import tax on goods from the Asian country, raising the possibility of an all-out trade war between the two largest economies.

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

Asked about accepting the American proposal to participate in its conflict with China, Reeves said she was "very concerned" by Chinese measures and called on the Beijing authorities "to avoid restrictions and restrict access."

She said the action was "damaging for the international commerce and creates further headwinds."

"In my view there are areas where we must challenge Chinese policies, but there are also important chances to export to Chinese markets, including financial services and other sectors of the economic system. We've got to achieve that equilibrium appropriate."

The Treasury chief also stated she was collaborating with other major economies "on our own critical minerals plan, so that we are less reliant."

NHS Drug Costs and Funding

Reeves also acknowledged that the price the NHS pays for medicines could rise as a consequence of ongoing discussions with the US government and its drugs companies, in exchange for lower tariffs and funding.

A number of the world's largest drug companies have said in recent statements that they are either delaying or canceling projects in the UK, with some blaming the modest returns they are obtaining.

Recently, the Science Minister said the cost the NHS pays for drugs would have to rise to prevent businesses and drug research funding leaving the UK.

Reeves stated to media: "We have seen as a result of the payment system, that drug testing, new drugs have not been offered in the UK in the extent that they are in other EU nations."

"The objective is to ensure that people getting treatment from the NHS are can access the best critical medicines in the world. And so we are reviewing these issues, and... seeking to secure additional investment into the UK."