After more than a week of turmoil in the financial markets, Prime Minister Liz Truss’s new administration reversed plans to cut the highest income tax rate in the country.
On September 23, the Chancellor of the Exchequer Kwasi Kwarteng announced a mini-budget aimed at boosting growth by cutting taxes and regulation.
The package included vast government borrowing and a proposal to scrap the top 45% income tax on earnings above 150,000 pounds ($167,000) a year.
The plan sent the financial markets into turmoil as investor confidence in the government fell and the Bank of England had to intervene with 65 billion pounds to shore up the markets.
Less than four weeks after taking office, the decision to reverse course will put Truss and Kwarteng under heavy political pressure, as the Conservative Party hits record low levels [of popularity] in the opinion polls.
