MNI BRIEF: UK Government Back Down From Controversial Tax Cut

The UK has abandoned plans to abolish the 45p rate paid by the country's top earners, Chancellor Kwasi Kwarteng announced Monday. The plans, attacked publicly by many Conservative MPs on Sunday, were announced as part of Kwarteng's 'mini-budget' laid out to Parliament on September 23.

Kwarteng said the plans, which were set to cost GBP2 billion annually, were becoming a distraction to the wider growth plan and following discussions with Prime Minister Liz Truss the government has decided not to proceed. The cut in tax for top earners has weighed heavily on the government in recent days, with the latest polling showing the opposition Labour Party seeing leads in double digits.

Sterling recovered its poise following the announcement, rising to 1.1215 against the dollar, having touched overnight lows at 1.1175. Last Monday, sterling fell to an all-time low against the dollar at 1.0350.