"I came in at a time of great economic and international instability," Ms. Truss said in her resignation speech to the nation. "Families and businesses were worried about how to pay their bills. Putin's illegal war in Ukraine threatens the security of our whole continent. And our country has been held back for too long by low economic growth. I was elected by the Conservative Party with a mandate to change this. We delivered on energy bills and on cutting national insurance, and we set out a vision for a low-tax, high-growth economy that would take advantage of the freedoms of Brexit."
However, given the situation, Ms. Truss said she cannot deliver on that mandate and had notified King Charles III of her resignation as leader of the Conservative Party. She added that a leadership election will take place within the next week, which "will ensure that we remain on a path to deliver our fiscal plans and maintain our country's economic stability and national security."
Ms. Truss will remain in her role as prime minister until a successor is chosen, she said.
Money managers highlighted the continued uncertainty in the U.K. "First her policies went up in flames, then her brief career as prime minister," Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said in an emailed comment. "The great political gamble of Liz Truss has spectacularly backfired but not before wreaking significant damage to the U.K. economy. It will take considerable time before the risk premium attached to U.K. assets fades away, following the financial nervous breakdown which followed the mini-budget."
Ms. Streeter added that, with the third prime minister in a year expected to be announced by the end of October, "the U.K. will still be viewed in financial markets as politically unstable. What investors crave is more steadiness and reliability but until they know who will take charge and lead an economic recovery, that stability still remains highly elusive which means that neither sterling nor stocks are likely to make any big strides of progress.''
Bloomberg contributed to this story