UK Shares Slide Despite Tax Reversal

(RTTNews) - U.K. stocks fell on Monday and the pound rallied against the dollar after the British government reversed plans to cut the highest rate of income tax that helped to spark a rebellion in her party and turmoil in financial markets.

The U.K. government decided to abandon its plan to scrap the 45 percent tax rate, which was announced just 10 days before, after coming under severe criticism for such a relaxation for the high earners at the time of rising living costs.

"...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," Chancellor of the Exchequer Kwasi Kwarteng said in a statement.

"As a result, I'm announcing we are not proceeding with the abolition of the 45p tax rate. We get it and we have listened."

However, Kwarteng said he will not resign following the embarrassing U-turn on tax cuts.

The benchmark FTSE 100 was down 57 points, or 0.8 percent, at 6,836 after closing 0.2 percent higher on Friday.

Banks HSBC Holdings and Standard Chartered fell around 2 percent each.

BP Plc rose over 2 percent and Shell added 1.3 percent as oil prices jumped nearly percent on talk of OPEC+ members discussing about an oil output cut at the group's next meeting on Oct. 5.

Halma lost 3 percent after the safety equipment maker bought medical consumable device maker IZI Medical Products LLC for up to USD168.0 million.

Essentra soared 11 percent after the essential components business offloaded its filters business to a wholly owned subsidiary of Centaury Management for an enterprise value of approximately £262.1m.