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UK’s Kwarteng scraps tax cut after market meltdown

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Britain’s Chancellor of the Exchequer Kwasi Kwarteng junked a plan to cut taxes for high earners after a backlash from financial markets and his own Conservative Party colleagues that plunged the country into an economic crisis.

“We get it, and we have listened,” Kwarteng said as he announced the dramatic U-turn on Twitter on Monday.

The hugely controversial tax cut was a key part of his and Prime Minister Liz Truss’ mini-budget announcement last month, which went dramatically awry. The measure had “become a distraction from our overriding mission to tackle the challenges facing our country,” Kwarteng said in his statement.

The scale of opposition from Kwarteng’s Conservative colleagues threatened his ability to deliver the policy anyway as the pound tanked and government borrowing costs soared, forcing the Bank of England to intervene. A rebellion was brewing among Tory MPs, with even senior figures such as ex-Cabinet minister Michael Gove going public to denounce the move.

It is not clear yet whether Kwarteng’s retreat will salvage his own career, or the credibility of his boss, Truss, who is facing disastrous polls after being prime minister for just a month.

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