GBP/USD hits weekly high following tax cut U-turn, WTI crude hits twelve-day high on Monday [Video]

The British Pound rebounded on Monday, as the government scrapped plans to lower the top rate of tax.

Last week, Chancellor Kwasi Kwarteng lowered the top rate of tax from 45% - 40%, which would have been the lowest rate for top earners in the G-7.

However, following the reaction on markets, with GBPUSD falling to a historical low, he stated today, “We get it, and we have listened”.

He added that, “I can be frank, I know the plan put forward only 10 days ago has caused a little turbulence”

Kwarteng finally confirmed that, “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. As a result, I’m announcing we are not proceeding with the abolition of the 45p tax rate”.

GBPUSD rose to a one week high on the news. 

WTI crude hits 12-day high on Monday

WTI crude was also higher to start the week, as markets began to anticipate a possible output cut.

This comes ahead of the Organization of the Petroleum Exporting Countries (OPEC) and its allies, which includes Russia (OPEC+) meeting this week.

It is expected that the cartel will potentially cut supply by up to 1 million barrels per day.

The meeting which will take place this Wednesday comes as oil prices have recently fallen, due to a stronger U.S. Dollar, and supply chain disruptions.

Should it happen, this will be the second consecutive cut, and the biggest since 2020.

As of writing, WTI is trading at $83.71.