London: United Kingdom government has abandoned its plan to abolish the 45% top rate of income tax following a major backlash over the policy and a turbulent reaction from markets.

In a statement posted online Monday, finance minister Kwasi Kwarteng said the plan “had become a distraction. We get it, and we have listened.”

The chancellor said the decision to cut tax for people on incomes of 150,000 pounds (USD 167,000) or more “has become a distraction from our overriding mission to tackle the challenges facing our country”.

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He continued: “As a result, I’m announcing we are not proceeding with the abolition of the 45p tax rate.”

“From supporting British business to lowering the tax burden for the lowest paid, our Growth Plan sets out a new approach to build a more prosperous economy,” he said in a statement.

“However, it is clear that the abolition of the 45 per cent tax rate has become a distraction from our overriding mission to tackle the challenges facing our country,” he added.

“As a result, I’m announcing we are not proceeding with the abolition of the 45 per cent tax rate. We get it, and we have listened,” he wrote.

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According to a CNN report, the announcement marks a major climb-down for new Prime Minister Liz Truss, whose government has been roiled by the reaction to its sweeping proposed tax cuts, which included slashing the top rate of income tax to 40% from 45%.

The radical cuts sent the pound plunging to historic lows and sparked market chaos, leading to a revolt within the governing Conservative Party, the report added.

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