Britain Cancels High Income Tax Cut After Pound Troubles

Monday, October 3, 2022 | Tag Cloud Tags: , , , ,

By Stefan J. Bos, Chief International Correspondent Worthy News

LONDON (Worthy News) – Britain’s government has dropped plans to cut income tax for top earners, part of a package of unfunded cuts that sent the pound to record lows.

Prime Minister Liz Truss said she could have “done a better job laying the ground” for the September 23 announcements, which rattled financial markets. We get it, and we have listened.

“The abolition of the 45 percent [for high earners] had become a distraction from our mission to get Britain moving,” Truss said in a message on the social networking site Twitter.

“Our focus now is on building a high-growth economy that funds world-class public services, boosts wages, and creates opportunities across the country,” she added.

Chancellor Kwasi Kwarteng explained he wouldn’t scrap the top 45 percent income tax rate paid on earnings above 150,000 pounds ($261,000) annually.

His decision followed a backlash even within the ruling Conservative Party. Soon after the announcements, the British pound and government bonds rallied, though fears of recession remained.

The pound jumped by as much as a cent to over $1.126 – its highest level in over a week, just a week after it slumped to a record low of around $1.035.

Not everyone was impressed with the leader of Britain’s opposition Liberal Democrats saying Chancellor Kwarteng should resign. “They didn’t listen when people’s mortgages soared, the pound crashed, and our economy tanked,” Ed
Davey tweeted. “Kwasi Kwarteng must resign now, and this rotten budget needs to be scrapped,” he added.

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