The announcement comes after a tumultuous six-week term in which her policies triggered upheaval in financial markets.
British Prime Minister Liz Truss has dramatically announced her resignation just six weeks after taking office.
Truss bowed to the inevitable on Thursday after her right-wing platform of tax cuts disintegrated and as many MPs among the ruling Conservatives revolted.
Speaking in Downing Street, Truss said she would stay on as prime minister until a successor is chosen to serve as Tory leader.
"We've agreed that there will be a leadership election to be completed within the next week," she said, after senior backbench MP Graham Brady told her the game was up.
"This will ensure that we remain on a path to deliver our fiscal plan and maintain our country's economic stability and national security.
"I will remain as prime minister until a successor has been chosen."
The election to replace outgoing Truss as leader of the Conservative Party should take place by October 28, the official in charge said.
"It will be possible to conduct a ballot and conclude a leadership election by Friday the 28th of October. So we should have a new leader in place before the fiscal statement which will take place on (October) the 31st," Graham Brady, chairman of the influential 1922 Committee of backbench MPs, told reporters.
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The end for Truss came after a key minister resigned and many Tory MPs rebelled over an important vote in chaotic scenes at the House of Commons late on Wednesday.
By Thursday morning, more than a dozen Conservative MPs had publicly urged Truss to resign, after her tax-cutting plans caused a market meltdown during an already severe cost-of-living crisis.
Many more were reported to have submitted letters to Brady calling for her to be removed, although party rules would have forbidden another leadership campaign for 12 months.
"The prime minister acknowledges yesterday was a difficult day and she recognises the public wanted to see the government focusing less on politics and more on delivering their priorities," her official spokesperson told reporters.
Barely two hours later, she quit.
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The United Kingdom’s Prime Minister Liz Truss resigns amid turmoil in her government after just 44 days in office pic.twitter.com/sDbuWrxTcP— TRT World (@trtworld) October 20, 2022
Labour demands general election
UK opposition leader Keir Starmer demanded an immediate general election after Truss announced her resignation.
"The Tories cannot respond to their latest shambles by yet again simply clicking their fingers and shuffling the people at the top without the consent of the British people. We need a general election - now," the Labour party leader said.
The Conservative Party "has shown it no longer has a mandate to govern," he added.
"After 12 years of Tory failure, the British people deserve so much better than this revolving door of chaos.
"Now, they have crashed the economy so badly that people are facing £500 ($563) a month extra on their mortgages. The damage they have done will take years to fix."
"Each one of these crises was made in Downing Street but paid for by the British public. Each one has left our country weaker and worse off," he said.
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