LONDON—Chancellor of the Exchequer of the United Kingdom Kwasi Kwarteng on Monday scrapped a plan to cut the top 45% income tax rate after turmoil in the country’s financial markets, an intervention by the Bank of England and the threat of a large-scale rebellion by Conservative Party lawmakers.
The U-turn is a major setback for the new Prime Minister Liz Truss, who based his leadership on a radical overhaul of the British economy. The government, which championed the measure announced late last month as recently as Sunday, bowed under pressure from international investors who balked at the scale of unfunded tax cuts and Conservative Party lawmakers shocked by polls showing they face a near wipeout in the next general election. .