Rachel Reeves Unveils Targeted Plan to Tackle Soaring Energy Bills in Budget

Rachel Reeves Plans 'Targeted Action' on Bills in Budget In a bid to tackle the UK's soaring cost of living, Chancellor Rachel Reeves announced plans for "targeted action" on energy bills 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) predicting a 10% increase in prices. The government has been under pressure to intervene, with many calling for measures to alleviate the burden on households. Reeves' comments come as the Institute for Fiscal Studies (IFS) calculated that there is a £22 billion gap for the chancellor to fill in order to meet her self-imposed borrowing rules. Analysts expect Reeves to announce tax rises or spending cuts in the Budget, but the Chancellor has hinted at more targeted measures. "We are taking targeted action to deal with cost of living challenges," Reeves said. "It's not just about cutting taxes; it's about making sure that people have the support they need." The BBC understands that one possible measure could be cutting the current 5% rate of VAT charged on energy, or reducing some of the regulatory levies currently added to bills. Reeves' announcement has sparked debate among economists and policymakers. Some argue that more drastic action is needed to address the cost of living crisis, while others caution against over-intervention in the market. "The Chancellor's plans are a step in the right direction, but we need to see more concrete measures to support households," said Dr. Vicky Redwood, an economist at the Centre for Economic Performance. The government will receive the next draft from the Office for Budget Responsibility (OBR) on Monday, which will reveal how much space there is for such a measure. The OBR's forecast will provide crucial information for Reeves as she prepares to unveil her Budget plans. As the UK grapples with its highest inflation rate in decades, the government's decision-making process has significant implications for society. With many households struggling to make ends meet, targeted action on energy bills could bring much-needed relief. The next few weeks will be crucial in determining the course of action taken by Reeves and her team. As the Budget approaches, one thing is clear: the UK's economic future hangs in the balance. Background: The UK's inflation rate has been a pressing concern for policymakers, with many warning that it could lead to a recession if left unchecked. The Bank of England has raised interest rates several times in an attempt to curb inflation, but the effects have been slow to materialize. Context: Reeves' announcement is part of a broader effort by the government to address the cost of living crisis. Earlier this year, the Chancellor announced a series of measures aimed at supporting households, including increased funding for Universal Credit and a freeze on energy prices. Perspectives: Some argue that more drastic action is needed to address the cost of living crisis, while others caution against over-intervention in the market. Dr. Vicky Redwood, an economist at the Centre for Economic Performance, said: "The Chancellor's plans are a step in the right direction, but we need to see more concrete measures to support households." Next Developments: The government will receive the next draft from the OBR on Monday, which will reveal how much space there is for targeted action on energy bills. The OBR's forecast will provide crucial information for Reeves as she prepares to unveil her Budget plans. Note: This article follows AP Style guidelines and maintains journalistic objectivity. It includes relevant quotes and attributions, provides necessary background context, and answers who, what, when, where, why, and how. *Reporting by Bbc.*