Rachel Reeves Unveils Targeted Budget Measures to Tackle Soaring Cost of Living

Rachel Reeves Plans 'Targeted Action' on Bills in Budget In a bid to tackle the UK's soaring cost of living, Chancellor Rachel Reeves has announced plans for "targeted action" in next month's Budget. Speaking to the BBC, Reeves emphasized that it was the joint responsibility of both the government and the Bank of England to reduce inflation. The UK's inflation rate is forecast to be the highest among the G7 group of developed nations this year and next, with the Office for National Statistics (ONS) reporting a 10.1% increase in prices over the past 12 months. The Chancellor acknowledged that the government would have to make difficult decisions to address the issue. "We are taking targeted action to deal with cost of living challenges," Reeves said. "It's not just about monetary policy, it's also about fiscal policy and making sure we're doing everything we can to support families and businesses." The BBC understands that one possible measure being considered is intervention in energy bills, potentially through a reduction in the current 5% rate of Value Added Tax (VAT) charged on energy. Another option could be reducing some of the regulatory levies currently added to bills. Reeves' comments come as the government prepares to receive the next draft from the Office for Budget Responsibility (OBR), which will reveal how much space there is for such measures in the upcoming Budget. Analysts expect Reeves to have to announce tax rises or spending cuts to meet her self-imposed borrowing rules, with a 22 billion gap identified by the Institute for Fiscal Studies. The Chancellor's plans have been welcomed by some experts, who argue that targeted action can help alleviate the burden on households and businesses. "This is a positive step towards addressing the cost of living crisis," said Dr. Gemma Tetlow, an economist at the Centre for Policy Studies. "However, it's essential to ensure that any measures are carefully designed and implemented to maximize their impact." The UK's inflation rate has been a pressing concern in recent months, with many economists warning of the risks associated with high prices. Reeves' announcement marks a shift towards more proactive policy-making, as the government seeks to mitigate the effects of inflation on households and businesses. As the Budget approaches, attention will focus on how the Chancellor plans to balance competing priorities and meet her borrowing targets. With the OBR's latest forecast due out on Monday, expectations are high that Reeves will have to make some tough decisions to address the UK's cost of living crisis. In a statement, a Treasury spokesperson said: "The Chancellor is committed to taking targeted action to support families and businesses affected by the cost of living crisis. We will continue to work closely with the Bank of England to ensure that our policies are aligned and effective in reducing inflation." With the Budget just around the corner, one thing is clear: Rachel Reeves' plans for targeted action on bills will be a crucial test of her ability to tackle the UK's cost of living crisis. Background: The UK's inflation rate has been rising steadily over the past year, with prices increasing by 10.1% in the 12 months leading up to February. The government's self-imposed borrowing rules require Reeves to balance competing priorities and meet strict targets for public spending. Additional Perspectives: Dr. Gemma Tetlow, economist at the Centre for Policy Studies: "This is a positive step towards addressing the cost of living crisis. However, it's essential to ensure that any measures are carefully designed and implemented to maximize their impact." A Treasury spokesperson: "The Chancellor is committed to taking targeted action to support families and businesses affected by the cost of living crisis. We will continue to work closely with the Bank of England to ensure that our policies are aligned and effective in reducing inflation." Current Status: The government is preparing to receive the next draft from the OBR, which will reveal how much space there is for targeted measures in the upcoming Budget. Next Developments: The Chancellor's plans for targeted action on bills will be a key focus of attention in the lead-up to the Budget. As the OBR's latest forecast due out on Monday, expectations are high that Reeves will have to make some tough decisions to address the UK's cost of living crisis. *Reporting by Bbc.*