In this photo illustration, the British pound is seen displayed.
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LONDON — Sterling jumped against the U.S. dollar on Thursday following multiple reports that the British government is in talks to scrap parts of its unfunded package of tax cuts.
The British pound traded 1.5% higher at $1.1269 during afternoon deals in London.
Sterling turned positive for the session in mid-morning trade, before extending gains on reports Prime Minister Liz Truss could be poised to make changes to the government’s fiscal plan.
Sky News reported discussions were underway in Downing Street over whether to reconsider some of the market-rocking tax cuts that Finance Minister Kwasi Kwarteng’s announced on Sept. 23. It is thought changes to corporation tax and dividend tax are to be reconsidered.
The U.K. Treasury was not immediately available to comment when contacted by CNBC.
Truss has repeatedly defended the government’s radical economic plan, despite the proposed measures sending financial markets into a tailspin as investors sold off the pound and ditched U.K. bonds.
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