“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.
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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In the days following their announcement of the pound It dropped to an all-time lowMortgage deals were It has been withdrawn from the market British government bonds began selling at a historical price, causing the Bank of England to do so Start a temporary purchase program to smooth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.
The pound jumps briefly
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.
Main U-turn
Grant Shapps, the former transport minister, said in an interview with the BBC on Monday morning that the rollback of the tax cut at the highest rate was a “reasonable reaction” because the tax cut was “for people who need it the least… which was unsustainable.” “.
It represents a major and humiliating turnaround for new Prime Minister Liz Truss, who has recently been insisting that she is “fully committed” to cutting.
She also revealed that the decision was made by Kwarteng and not made public to her entire Cabinet. The Treasury said the scheme would have provided an average of £10,000 in annual interest to the country’s largest 660,000 people.
“Repealing the 45 per cent rate has become a distraction from our mission to get Britain moving,” Truss said in a tweet on Monday.
“Our focus is now on building a high-growth economy that finances world-class public services, boosts wages, and creates opportunity across the country.”
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