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Ms Truss is the third UK prime minister the country has had in the past four years.
In a speech outside Downing Street, she said the Conservative Party had elected her on a mandate to cut taxes and boost economic growth.
But given the situation, Ms Truss said: “I recognise that I cannot deliver the mandate on which I was elected by the Conservative Party.”
Tory MPs urged Ms Truss to go after her government was engulfed by political turmoil, following a U-turn in most of her economic policies.
She was elected by the Tory membership in September, but she lost authority after a series of disasters.
The Conservative leader said she would remain in post until a successor formally takes over as party leader and is appointed prime minister by King Charles III.
Ms Truss said she would remain in post until a successor formally takes over as party leader and is appointed prime minister by King Charles III.