LONDON: The government of British Prime Minister Liz Truss was forced on Monday (Oct 3) into a humiliating U-turn, reversing plans to cut the highest rate of income tax that helped to spark a rebellion in her party and turmoil in financial markets. Truss, and her finance minister Kwasi Kwarteng, announced
LONDON: The government of British Prime Minister Liz Truss was forced on Monday into a humiliating U-turn, reversing plans to cut the highest rate of income tax that helped to spark a rebellion in her party and turmoil in financial markets.
Truss, and her finance minister Kwasi Kwarteng, announced a new"growth plan" on Sep 23 that would cut taxes and regulation, funded by vast government borrowing to snap the economy out of years of stagnant growth. But the plan triggered a crisis of confidence in the government, hammering the value of the pound and government bond prices and jolting global markets to such an extent that the Bank of England had to intervene with a £65 billion programme to settle the gilt market.
"It is clear that the abolition of the 45p tax rate has become a distraction from our overriding mission to tackle the challenges facing our country," Kwarteng said in a statement. "As a result, I'm announcing we are not proceeding with the abolition of the 45p tax rate. We get it, and we have listened."
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