LONDON: The UK government has dropped plans to cut income tax on high earners, part of an unfunded package of cuts that has caused turmoil in financial markets and sent the pound to record highs.
Treasury chief Kwasi Kwarteng said on Monday it would not scrap the top rate of 45% income tax paid on earnings above 150,000 pounds ($167,000) a year.
“We understand and we have listened,” he said in a statement.
The U-turn comes as more government lawmakers Conservative party activate government tax plans announced 10 days ago.
It also comes hours after the Tories pre-released excerpts from a speech Kwarteng is due to deliver later Monday at the party’s annual conference, saying: ‘We need to stay the course. I am convinced that our plan is the right one.
Premier Liz framework defended the measures on Sunday, but said she could have “done a better job setting the stage” for the announcements.
Truss took office less than a month ago, promising to radically reshape Britain’s economy to end years of sluggish growth. But the government’s September 23 announcement of a stimulus package including 45 billion pounds ($50 billion) in tax cuts, to be paid for by public borrowing, sent the pound plummeting to a record high against to the dollar.
The Bank of England was forced to intervene to support the bond market, and fears that the bank would soon raise interest rates caused mortgage lenders to withdraw their cheapest offers, causing unrest for home buyers. houses.
Treasury chief Kwasi Kwarteng said on Monday it would not scrap the top rate of 45% income tax paid on earnings above 150,000 pounds ($167,000) a year.
“We understand and we have listened,” he said in a statement.
The U-turn comes as more government lawmakers Conservative party activate government tax plans announced 10 days ago.
It also comes hours after the Tories pre-released excerpts from a speech Kwarteng is due to deliver later Monday at the party’s annual conference, saying: ‘We need to stay the course. I am convinced that our plan is the right one.
Premier Liz framework defended the measures on Sunday, but said she could have “done a better job setting the stage” for the announcements.
Truss took office less than a month ago, promising to radically reshape Britain’s economy to end years of sluggish growth. But the government’s September 23 announcement of a stimulus package including 45 billion pounds ($50 billion) in tax cuts, to be paid for by public borrowing, sent the pound plummeting to a record high against to the dollar.
The Bank of England was forced to intervene to support the bond market, and fears that the bank would soon raise interest rates caused mortgage lenders to withdraw their cheapest offers, causing unrest for home buyers. houses.
