The Prime Minister said the rollback was because the tax overhaul had become a ‘distraction from our mission to move Britain forward’.
British Prime Minister Liz Truss has abandoned a controversial plan to abolish the highest income tax rate after the proposal angered MPs and sent the pound to a record low.
“We understand and we have listened,” Truss said in a statement posted on Twitter Monday.
“Abolishing the 45pc rate has become a distraction from our mission to move Britain forward. Our focus now is on building a high-growth economy, funding world-class public services, raising wages and creating opportunities across the country.”
Truss’ statement came shortly after Exchequer Chancellor Kwasi Kwarteng said a plan to cut the 45 per cent tax rate, which applies to incomes over £150,000 ($168,000), would not proceed after become distracted from “the important task of government to address the challenges facing our country”.
The British pound immediately rose on the news, reaching $1,128, a 10-day high.
The decision marks a modest escalation for Truss, who has held the top job for less than a month and on Sunday confirmed her government’s controversial economic plan. will be carried out as planned.
“Small Budget” by Kwarteng causing investors to rush to sell the pound last week in a vote of no confidence in London’s ability to manage debt amid a sharp rise in interest rates.
The plan, which includes the biggest tax cut in 50 years along with a subsidy package to help households cope with rising energy bills, will require the government to borrow an additional £72 billion (77.7 billion). billion USD) over the next six months.
