The previous government's 1.25 percentage point increase in national insurance for both businesses and taxpayers has also been reversed.
At the same time as effectively cutting its revenue it confirmed its energy support package, including a price guarantee for both households and businesses, would cost £60bn in the first six months alone.
Much of this is unfunded and will need to be financed through issuing gilts.
According to the FT the UK Debt Management Office increased its planned bond sales for the 2022-23 fiscal year by £62.4bn to £193.9bn.
The higher UK government yields are, the more expensive it will be for the government to borrow money.
Bethany Payne, global bond portfolio manager at Janus Henderson Investors, said on Friday the government's strategy was a "radical economic gamble".
"We had been concerned over the ability of the Bank of England to sustainably sell gilts through the quantitative tightening due to start on October 3, but today we are asking whether quantitive tightening is over before it even began.
"While the extra gilt issuance is close to our consensus before the mini-Budget, what is different is the pace of the issuance which will increase 87 per cent between now and the end of the fiscal year. Issuance is skewed to the front end as well, so shorts have taken a lot of the pain from extra issuance, leading to the curve flattening.
"Meanwhile, it is now likelier that we see bigger rate hikes from the Bank of England – maybe as much as 100bp in November."
Director at Fairview Investing, Ben Yearsley, said the mini “Kwasi budget” was a gamble and a break from the orthodoxy of the Osborne and Hammond years where balancing budgets was the priority.
"If Kwasi Kwarteng’s first acts of chancellor put the UK on the path to sustained higher growth he will rightly be lauded in a similar vein to Lord Lawson, however if it fails it’s probably Lord Lamont he will be compared to," he said.
Sterling fell to $1.11 in the immediate aftermath of the statement, a level not seen for decades, and down 1.28 per cent by Friday lunchtime.
Samuel Mather-Holgate of Swindon-based advisory firm, Mather & Murray Financial, said: "It’s hard to believe economists are talking about pound parity with the dollar. This will severely impact importers, and we buy in a lot more than we export.
"A weak pound has also put pressure on the gilt market, and 2-year borrowing is now at 4 per cent. That’s compared to nearly zero a year ago. This means less money for public spending. This is a big gamble that has to pay off or we're in big trouble."