The UK currency has bounced back this morning, climbing after it fell to record lows last week, as Prime Minister Liz Truss’s government was forced to perform a U-turn, scrapping a plan to remove the UK’s top tax rate of 45%.

On Monday morning, the pound sterling rose as far as $1.128, its highest in 10 days.

Chancellor of the Exchequer Kwasi Kwarteng confirmed the widely criticised policy, defended by Truss only last night, was being reversed ahead of a much-anticipated speech at the Conservative Party’s national conference later today. 

In a statement entitled: “We get it, and we have listened,” he said it was clear that the abolition of the 45p tax rate had become a distraction from the government’s overriding mission, which is tackling challenges including the cost-of-living crisis, while accelerating economic growth and major infrastructure projects. 

The UK currency fell to record lows at the start of last week following the chancellor’s mini budget, which included removing the highest rate of tax, benefitting people who earn £150,000 (AED 615,000) or higher per annum, angering average earners facing economic hardship. 

The Bank of England (BoE) was last week forced to intervene in the UK’s bond market to try to stabilise a sell-off in response to the mini budget, while a number of UK mortgage lenders withdrew deals or raised interest rates for borrowers amid the uncertainty. 

(Reporting by Imogen Lillywhite; editing by Seban Scaria)