Liz Truss says govt will U-turn and raise corporation tax

Hours after sacking her finance minister, and stating the 'need to act now to reassure the markets', Truss said

British Prime Minister Liz Truss has abandoned a planned cut to corporation tax, scrapping a key part of an economic plan that sparked weeks of market and political turmoil.

Truss said at a hastily arranged news conference Friday that she was acting to “reassure the markets of our fiscal discipline”.

Truss also fired Kwasi Kwarteng as Treasury chief on Friday, replacing him with former Cabinet minister Jeremy Hunt.

Truss is trying to restore order after three weeks of turmoil sparked by the government's tax-cutting “mini budget.”

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The Sept 23 statement sent the pound plunging to record lows against the dollar and led the Bank of England to step in to prevent a wider economic crisis.

Truss vowed to press on with other aspects of her economic plan, saying “I want to deliver a low tax, high wage, high growth economy.”

Truss, a free-market libertarian, came to power last month pledging to cut taxes to spur growth. But her ability to deliver on that commitment is now in doubt.