UK government cancels plan to cut taxes on high-income earners at a major turning point

The UK government on Monday backed away from a planned top-rate income tax repeal, after a public backlash and major market turmoil.

“It is clear that the abolition of the 45 pence tax rate has become a distraction from our primary task of addressing the challenges facing our economy,” Finance Minister Kwasi Quarting said in a statement.

“As a result, I’m announcing that we’re not going to go ahead with eliminating the 45p tax rate. We’ve got it, and we’ve listened.”

The cuts were poorly received by financial markets, and the abolition of the 45% tax paid on income over 150,000 pounds ($166,770) was seen as politically harmful as Britons grapple with the cost of living crisis.

In the days following their announcement of the pound It dropped to an all-time lowMortgage deals were It has been withdrawn from the market British government bonds began selling at a historical price, causing the Bank of England to do so Start a temporary purchase program to smooth out fluctuations.

British pound It rose sharply Monday morning on reports that the UK government will announce a turnaround. Sterling pound was 0.8% higher vs. dollar At one point, it fell to $1.1212 by 7:30 AM London time after the official announcement. Bring it back to the level it was before Kwarteng unveils batch of tax cuts On September 23.

with the ruling Conservative Party sink In the polls since the so-called “mini-budget” and that has been Criticize By the International Monetary Fund in a rare move, many politicians spoke out against the proposals.