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The UK government said on Monday it was dropping controversial plans to end the top income tax rate for high earners, an embarrassing reversal for Prime Minister Liz Truss after international condemnation of the policy, which roiled markets and pushed the pound to record lows.

Important facts

Truss’ government confirmed it was withdrawing plans to cut the top 45% of income tax – for people earning more than £150,000 ($168,000) a year – announced just ten days ago by Finance Minister Kwasi Kwarteng.

Kwaiteng said The proposal, one of several unpopular fiscal policies that sparked widespread public outrage and accusations of injustice during a livelihood crisis, had become a “distraction” from the government’s mission to boost growth.

The pound surged against the dollar on news of the government’s reversal, briefly rebounding to pre-Kwarteng policy announcement levels and hitting a one-week high of $1.128 before falling back to $1.121.