Liz Truss Resigns as UK Prime Minister

In a statement read outside Downing Street, Truss said: "I came into office at a time of great economic and international instability," sky reported.

"Families and businesses were worried about how to pay their bills."

Truss added that she was elected "with a mandate to change this", saying: "We delivered on energy bills."

She said she recognizes she "cannot deliver the mandate" on which she was elected and that there will be a leadership election "to be completed within the next week."

Her time in office has been dominated by market chaos prompted by the mini-budget that was announced by former chancellor Kwasi Kwarteng last month.

Despite sacking Kwarteng last week and reversing almost all the unfunded tax cuts that had been proposed, the prime minister's position had continued to come under pressure.

Some Tory MPs had publicly called for her resignation, but many others had privately suggested her time was up.

On Monday, new Chancellor Jeremy Hunt announced the government would be cutting the energy price guarantee back to six months from the two years previously promised and abandoning the planned 1p reduction to the basic rate of income tax.

The announcement was widely seen as the complete upheaval of Truss's economic program, central to her leadership bid.

After Hunt's statement, the prime minister's official spokesman refused to deny that Truss was about to resign, instead saying she was "working very closely" with the new chancellor.