British PM humiliated on economic package retreat

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British Prime Minister Liz Truss hits a humiliating U-turn on tax cut decision included in the previously announced economic package, just one day after she announced being  "absolutely committed" to it.

British Prime Minister Liz Truss does an embarrassing U-turn, one day after declaring that she was "totally committed" to the tax cut decision, which was part of the previously announced economic package.

Almost one week ago, PM Truss and Chancellor of the Exchequer, Kwasi Kwareng, announced huge tax cuts funded by a significant increase in borrowing in a new "mini-budget" that led to a sharp slide in UK bonds and currency, were the Sterling hit a 41 year low against the dollar, and an extreme negative reaction from the financial markets.

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Only a small number of Conservative MPs supported the mini-budget; others opposed it, most notably Julian Smith, a former whip for the party, who said it was wrong to enact a "huge tax cut for the very rich at a time of national crisis and real fear and anxiety among low-income workers and citizens." It is regarded as an unusual occurrence that the IMF joined the voices in denouncing the mini-budget.

Following the massive turbulence that hit the markets and the public outrage, UK government announced on Monday dumping the 45% to 40% tax-cut plan on incomes over £150,000, to which Kwarteng tweeted, "We get it, and we have listened," stating that, "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." The news drived the Sterling sharply upwards against the USD, where it settled at 1.1212 at 7:30 following the confirmation that the cut was scrapped.

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In a talk with the BBC on Sunday, Truss claimed that the decision on cutting tax from high earners was made by Chancellor Kwasi and that she hadn't discussed it with her cabinet, in what appeared to be like "throwing (Kwarteng) under a bus," as MP Nadine Dorries described it.

Stating that the plan reveal did not go as planned due to communication errors with the UK minister of Finance, Truss tweeted, “Our focus now is on building a high growth economy that funds world-class public services, boosts wages, and creates opportunities across the country," adding that, "The abolition of the 45pc rate had become a distraction from our mission to get Britain moving.”

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"I'm very pleased that we've decided not to proceed with that because it was drowning out the elements of an excellent plan," stated Kwarteng to the BBC, while assuring that he did not consider resigning "at all".

Former UK transport secretary, Grant Shapps, described the decision to back down on the top rate tax cuts as sensible, stating the BBC cutting taxes from the people who least need them, "jarred for people in a way which was unsustainable.”

Following the recent events, a survey conducted by YouGov revealed that 51% of UK citizens believe that PM Truss should resign, while 54% think that Kwarteng needs to go.

Earlier, Tory members urged new PM Liz Truss to kick Kwarteng to the curb as they viewed her new government formation as a situation in dire straits. One member said: “Kwasi will have to go. She won’t have any option. They are actually crashing the economy and she will need somebody to blame.”

The party's former chancellor, Ken Clarke, labeled the Truss government to have initiated with a  “catastrophic start”, and hoped that the mini-budget initiative would be “torn up”, but in a statement to Sky News, in his opinion, Kwarteng's resignation would not improve the crisis, adding: “We cannot have a different chancellor every other week.”