British pound jumps on reports UK government may reverse parts of its tax-cutting proposals

According to reports, the British government is in talks to scrap some of its tax cuts.

During the afternoon deals in London, the British pound traded 1.5% higher at $1.1279.

After turning positive for the session in mid-morning trade, sterling rose sharply on reports that the prime minister could make changes to the government's fiscal plan.

The yield on the long-dated U.K. government bonds fell to just over 4%.

Sky News reported that discussions were taking place in the Prime Minister's office about the tax cuts. Changes to tax on dividends are thought to be reconsidered.

CNBC was unable to reach the U.K. Treasury.

The government's radical economic plan sent financial markets into a tailspin as investors sold off the pound and dumped U.K. bonds.

The plan to scrap the top 45% rate of income tax was reversed last week.

The government's proposals are necessary to grow the economy.