RACHEL Reeves is considering cuts to energy bills and rail fares in an effort to “bear down” on the cost of living.
The Chancellor said that targeted action at the Budget would be used to bring down inflation.
Speaking in Washington DC, Ms Reeves insisted the Government would act where it had some form of price control.
She said: “We want to bear down on the costs people face. But where there are regulated prices, of course we have a responsibility as well.
“I’m determined that we can bring inflation back to target.”
One option includes bringing down energy bills by reducing the five per cent VAT rate which could save the average household £86 a year.
Another is to cut travel costs. Almost half of rail fares, such as season tickets, are regulated by the Government.
Ms Reeves pointed out that she had frozen prescription costs at £9.90 earlier this year because they put pressure on family finances.
But she conceded further measures were needed in next month’s Budget as inflation was still too high.
Only this week, the International Monetary Fund said inflation in the UK would be the highest of major economies for this year and next.
Inflation stood at 3.8 per cent in July and August. But food inflation could hit six per cent by the end of the year.
And the economy’s sluggish growth means tax rises and spending cuts are needed at the Budget to fill a £30billion black hole, as Ms Reeves grapples with high borrowing costs.
The Chancellor’s troubles continued yesterday when it was revealed the UK only just turned to growth in August by a marginal 0.1 per cent.
And revised figures show growth fell 0.1 per cent in July.
Sanjay Raja, economist at Deutsche Bank, said the economy was “now running at a lower gear after a strong start to the year”.
He added: “We expect some turbulence to continue as we approach the end of the year.”