UK chancellor of the exchequer Kwasi Kwarteng is reversing the proposed scrapping of the 45% rate of income tax for high earners, ten days after it was first unveiled in the Mini Budget.
"It is clear that the abolition of the 45p tax rate has become a distraction from our overriding mission to tackle challenges facing our economy. As a result, I am announcing that we are not proceeding with the abolition of the 45p tax rate," he said in a statement.
The chancellor said that this would allow the government to focus on "delivering the major parts" of the Mini Budget, including its energy price guarantee, cutting taxes and driving supply side reforms and infrastructure projects.
Mini Budget 22: Chancellor scraps 45% top rate of income tax for high earners
The U-turn comes after several Tory MPs voiced their opposition to the plan and follows a report by The Telegraph on 2 October which outlined that Prime Minister Liz Truss would be delaying the vote on cutting the 45% rate of tax, citing government sources.
In what is believed to be a response to the announcement, the pound jumped against the dollar. According to Bloomberg, at 6am it stood at $1.1092. By 7.30am, it was at $1.240.
