Chancellor Kwasi Kwarteng has confirmed that the government will not proceed with plans to cut the 45p rate of tax for higher earners -- but insists he won't resign -- in what has been coined as a humiliating U-turn for the UK government.
Described as a tax cut for the rich, it was set out in his so-called mini-budget on 23 September, and prompted turmoil in the markets.
But, in a statement on Monday, Kwarteng said, "We get it, and we have listened" -- in response to fierce opposition from the markets, rival parties and some Conservative MPs.
The Chancellor is set to speak on the second day of the Conservative Party conference in Birmingham, where protesters have been voicing their concern about government plans to make around €50 billion worth of tax cuts with the aim of stimulating economic growth.
The mini-budget announcement caused the sterling to slump to record lows and forced the Bank of England to launch an emergency intervention to stabilise the economy.
The proposals were also criticized in a rare and damning interjection from the International Monetary Fund, which warned the move would increase inequality.