'The great Truss retreat': U-turn on 45% tax rate 'not the solution' to market turmoil

Uncertain outlook for gilts and sterling

The government’s U-turn on plans to remove the 45% tax rate for high earners is not the solution to market turmoil, industry experts argue, as the uncertain outlook for gilts and sterling remains.

Chancellor Kwasi Kwarteng revealed today (3 October) that the government will be reversing the plans to scrap the 45% rate of income tax for high earners, ten days after it was first unveiled in the Mini Budget. Kwarteng said that the planned tax cuts for high earners had become a "huge distraction" from their Growth Plan agenda, amid a growing revolt from Conservative Party MPs.  The Mini Budget on 23 September triggered a rout in the bond market, forcing the Bank of England to step in last week. However, investors seemed to welcome today's U-turn, with the yield on 10-year UK gilts ...