In a statement delivered outside Downing Street this afternoon, Truss announced a leadership election would be completed within the next week to choose a successor. 

Truss is set to remain as prime minister until a successor is chosen. 

In her statement, Truss said: "I came into office at a time of great economic and international instability.

"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.

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“I recognise though, given the situation, I cannot deliver the mandate on which I was elected by the Conservative party.”

Industry experts react to Truss' departure

This section will be updated throughout the day — check regularly for more comments from industry experts

3pm

Simon Webb, managing director finance and capital markets at LiveMore Capital: 

“The resignation of Liz Truss throws the country into further turmoil just as the markets were starting to settle down. The term 'we need a grown up in charge' has been somewhat over-used in the past couple of days, but the sentiment is true if what it means is that we need competence and stability.  At least the Conservative party has pledged to elect the new leader within the week so the period of uncertainty will be limited. What we need then are sensible, sound fiscal policies that run through to the next general election, to reassure the markets and give the country and the rest of the world the confidence that the UK is still a sound place to invest and do business. 

"Of utmost urgency for every mortgage holder is the need to see interest rates and the cost of living stabilise so that they can budget for their futures.”

2:59pm

Giles Coghlan, Chief Market Analyst, HYCM:

“After just 44 days in office, it appears that the markets and a party in open revolt have sealed Liz Truss’s fate. Although Truss was brought into usher in an era of growth and ‘trickle-down economics’, her strong pro-growth policy was poorly timed, sending the UK bond markets into a sharp sell off as her policies fanned the flames of surging inflation. To fend off instability, the Bank of England has even intervened in gilt markets, and it remains to be seen whether the central bank will now hike interest rates more quickly.

“With all that in mind, Truss’s departure is likely to be mildly GBP positive, depending on her successor for the premiership. Already, the UK gilt market was supported as rumours of the prime minister’s resignation came to light this morning, which is a good sign for the pound’s stability.”