The new U.K. government of Prime Minister Liz Truss scrapped an announced tax cut for the rich on Monday after the negative reception that was received from market forces as well as their fellow Conservative party members.

The released economic policies of Liz Truss, dubbed a ‘mini-budget’ by the press, included a large tax cut for high-income individuals that was not received well publicly, with the pound dropping significantly after the announcement, as well as a selling off of British bonds so severe that the Bank of England had to temporarily institute a buyback program to calm the volatility, according to CNBC.

Many fellow Conservative Party mates and Members of Parliament were also not keen on the new tax cut, with many criticizing how the tax cut will lead to further borrowing or trimming of the welfare budget in the midst of a cost-of-living crisis in the country, The Guardian reported.

“A sensible Conservative government must be very careful to make sure that at the other end of the equation, those in greatest need are not left behind,” Cabinet Minister Robert Buckland said. “We must remember that it is those who are in genuine need who will also need our help as a government. We have to not shirk our responsibilities in that respect, even if it does mean that for the time being there has to be greater expenditure.”

In response to the broad rejection of the mini-budget’s tax cut plans for the country, Finance Minister Kwasi Kwarteng, who has defended the tax cut since its announcement, has said that the government is scrapping its plans to do so after the public rebuke. “It is clear that the abolition of the 45p tax rate has become a distraction from our overriding mission to tackle the challenges facing our economy,” Kwarteng said in a statement. “As a result, I’m announcing we are not proceeding with the abolition of the 45p tax rate. We get it, and we have listened.”

“The abolition of the 45pc rate had become a distraction from our mission to get Britain moving,” Liz Truss said in her own statement. “Our focus now is on building a high growth economy that funds world-class public services, boosts wages, and creates opportunities across the country.”

The scrapping of the tax cut has resulted in a slight bounce back for the pound sterling in the market today, but many analysts said that the reprieve the British economy is experiencing may be temporary, NPR reported.

“Although U.K. assets are reacting well to the U-turn, they are far from being out of the woods,” analyst Jane Foley said.

“None of this growth plan will work unless we have stability. Let's hope this is the beginning of it,” businessman Tony Danker said.

Liz Truss and Kwasi Kwarteng
After a significant public and market pushback over their newly-released mini-budget, British Prime Minister Liz Truss has announced the scrapping of the planned high-income tax cuts on Monday. Leon Neal/Getty Images.

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