LONDON – The British government has abandoned plans to cut income taxes for top earners, part of a package of turmoil in financial markets that has engulfed financial markets and sent the pound to record highs. Have given.
Treasury chief Quasi Quarteng said on Monday he would not eliminate the top 45% rate of income tax paid on earnings of more than £150,000 ($167,000) annually.
“We get it, and we’ve heard,” he said in a statement.
The U-turn comes as more lawmakers from the governing Conservative Party roll out government tax plans announced 10 days ago. Quarteng is due to deliver later Monday at the party’s annual convention, hours after the Conservatives released advance excerpts of a speech, which said: “We must stay on course. I believe our plan is right.”
Prime Minister Liz Truss on Sunday defended the measures but said she could have done a “better job of laying the ground” for the announcements.
The truce took office less than a month ago, promising to radically reshape Britain’s economy to end years of sluggish growth. But the government announced a stimulus package on 23 September, which includes a 45 billion pound ($50 billion) tax cut to be paid for government borrowing, sending the pound to a record low against the dollar.
The Bank of England was forced to intervene to boost the bond market, and fears the bank would raise interest rates too soon, causing mortgage lenders to withdraw their cheapest deals, leading to home buyers. There was upheaval.