There was a dramatic shift in the currency rate of the British pound on Monday: it rose sharply against the dollar after the UK government announced the withdrawal of the plan to cut taxes for the rich, which scared investors and shook the market, writes Business Insider.

This news was confirmed today by UK Finance Minister Kwasi Kwarteng: the government is ready to abandon its plan to abolish the 45% top rate of income tax. The pound hit $1.1263 after news broke that Kwarteng had announced the new government’s tax and spending proposals.

Behind the British currency’s slump to a record low last Monday was a hint from the authorities that more tax cuts are possible, which spooked investors as the proposed policy of financing such cuts with debt put negative pressure on the stock market and other markets. Investors are concerned that this will spur inflation and, lead to faster interest rate hikes and undermine the country’s already struggling economy.

Several members of the ruling Conservative Party were also opposed, as were opinion polls, as such a cut was the biggest in almost 50 years, abolishing the top income tax rate and reducing the basic rate by 1%.

The International Monetary Fund has also previously strongly criticized the new fiscal package, which also includes scrapping a planned increase in the social security tax rate and reducing the tax on property purchases below 250,000 pounds. According to the IMF statement, this will be a contradiction to the Bank of England’s tightening of monetary policy.