Pound rises as Kwasi Kwarteng scraps 45p tax cut following market turmoil

The pound has rallied as the chancellor announced a U-turn on abolishing the top rate of tax for the highest earners.

On Monday sterling rose to levels seen before last month’s ‘mini’ budget - which sent markets into turmoil with the UK’s largest tax cuts in 50 years.

Kwasi Kwarteng confirmed the move to scrap the 45p tax rate was being abandoned, following more than a week of criticism.

The pound had slumped to a record low, sparking fears for the UK economy.

Mr Kwarteng faced fierced backlash over the scrapping of the top rate of income tax for those earning over £150,000.

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

Sterling surged to $1.13 at one stage overnight as reports emerged the government was preparing to U-turn.

It stood at $1.12 later in the morning.

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