Sterling briefly jumps after British government tax U-turn

The pound briefly jumped on Monday on news Britain would reverse plans to cut the highest rate of income tax, one contentious part of a package of financial measures that last month sent sterling and British government bonds tumbling. 22, the day before Kwarteng announced a new "growth plan" that would cut taxes and regulation, funded by vast government borrowing.

The pound briefly jumped on Monday on news Britain would reverse plans to cut the highest rate of income tax, one contentious part of a package of financial measures that last month sent sterling and British government bonds tumbling. "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 country," finance minister Kwasi Kwarteng said in a statement.

The pound rose as high as $1.128 after news of the U-turn was reported by the BBC, the currency's highest level since Sept. 22, the day before Kwarteng announced a new "growth plan" that would cut taxes and regulation, funded by vast government borrowing. Sterling then gave up most of those gains and was last at $1.1177 up 0.1%.

The euro was down 0.27% against the pound at 87.61 pence. "From a markets perspective, it is a good step in the right direction. It will take time for markets to buy the message but it should be ease the pressure, " said Jan von Gerich, chief analyst, Nordea

"Questions still remain and sterling will likely remain under pressure," he added.

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