UK Treasury chief scraps nearly all government tax cut plans

LONDON — U.K. Treasury chief Jeremy Hunt today reversed most of an economic package announced by the government just weeks ago, including a planned cut to income tax.

In a bid to soothe turbulent financial markets, Hunt said he was scrapping “almost all” the tax cuts announced last month and signaled public spending cuts are on the way.

Hunt said a planned 1 percentage point cut to the basic rate of income tax that had been due to take effect next year won’t happen. He also scaled back a cap on energy prices designed to help households pay their bills. It will now be reviewed in April rather than lasting two years.

Hunt was appointed Friday after Prime Minister Liz Truss fired Kwasi Kwarteng, who spent less than six weeks in the Treasury job. Truss and Kwarteng jointly came up with a Sept. 23 announcement of 45 billion pounds ($50 billion) in unfunded tax cuts that spooked financial markets, sent the pound to record lows and forced the Bank of England to take emergency action.

Today’s hastily scheduled announcement came two weeks before Hunt is due to set out a medium-term fiscal plan.