Reeves plans 'targeted action' on bills in Budget

"Chancellor Rachel Reeves has said she is planning "targeted action to deal with cost of living challenges" in next month's Budget. Speaking to the BBC in Washington, she said it was the job 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."

"The government will receive the next draft from the official forecaster, the Office for Budget Responsibility (OBR), on Monday, which will reveal how much space there is for such a measure. The expectation from most analysts is that Reeves will have to announce tax rises or spending cuts in order to meet her self-imposed borrowing rules Earlier on Thursday, the Institute for Fiscal Studies calculated there was a 22bn gap for the chancellor to fill, which is at the lower end of expectations."

Chancellor Rachel Reeves plans targeted action in the next Budget to address cost-of-living challenges. Both the government and the Bank of England share responsibility for reducing inflation. The UK's inflation rate is forecast to be the highest among G7 nations this year and next. Potential measures include cutting the 5% VAT on energy or reducing regulatory levies on bills. The Office for Budget Responsibility will deliver a draft that determines fiscal space. Analysts expect tax rises or spending cuts to meet borrowing rules, with the Institute for Fiscal Studies estimating a £22bn gap. Budget tax moves will focus on those with the broadest shoulders amid geopolitical and trade concerns.

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