October 4, 2022
A plan to eliminate the top rate of income tax in the U.K. was abandoned as a result of strong public opposition and significant market volatility.
Just a few weeks into its term, the new government proposed a broad range of tax cuts, but the financial markets were not happy with them. As Brits struggle with a cost-of-living crisis, lowering the top rate of tax on incomes over £150,000 ($166,770) to 40% was viewed as particularly political poisonous.
The pound hit an all-time low in the days that followed their statement, mortgage transactions were pulled off the market, and U.K. government bonds started to depreciate at a historic rate, prompting the Bank of England to launch a temporary purchase program to reduce volatility.
Finance Minister Kwasi Kwarteng announced on Monday that the government would abandon its intentions to lower taxes for the top earners in the nation.
Source: CNBC
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