The British government has dropped plans to cut income tax for top earners, part of a package of unfunded cuts that sparked turmoil on financial markets and sent the pound to record lows.
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In a dramatic about-face, Treasury chief Kwasi Kwarteng said Monday that he will not scrap the top 45% rate of income tax paid on earnings above 150,000 pounds ($167,000) a year.
The U-turn came after a growing number of lawmakers from the governing Conservative Party turned on government tax plans announced 10 days ago.
It also came hours after the Conservatives released advance extracts of a speech Kwarteng is due to give later Monday at the party's annual conference in the central England city of Birmingham. He had been due to say: "We must stay the course. I am confident our plan is the right one."
Prime Minister Liz Truss defended the measures on Sunday, but said she could have "done a better job laying the ground" for the announcements.
Truss took office less than a month ago, promising to radically reshape Britain's economy to end years of sluggish growth. But the government's Sept. 23 announcement of a stimulus package that includes 45 billion pounds ($50 billion) in tax cuts, to be paid for by government borrowing, sent the pound tumbling to a record low against the dollar.
