Liz Truss said on Thursday she would resign as prime minister, brought down by her economic programme that sent shockwaves through the markets and divided her Conservative Party just six weeks after she was appointed.

A leadership election will be completed by next Friday, October 28, to replace Truss, who is the shortest serving prime minister in Britain's history. George Canning previously held the record, serving 119 days in 1827, when he died.

Speaking outside the door of her Number 10 Downing Street office and residence, Truss accepted that she could not deliver the promises she made when she was running for Conservative leader, having lost the faith of her party.

"I recognise though, given the situation, I cannot deliver the mandate on which I was elected by the Conservative Party. I have therefore spoken to His Majesty the King to notify him that I am resigning as leader of the Conservative Party," she said.

"This morning I met the chairman of the 1922 Committee, Sir Graham Brady. We've agreed that there will be a leadership election to be completed within the next week. This will ensure that we remain on a path to deliver our fiscal plans and maintain our country's economic stability and national security.

"I will remain as prime minister until a successor has been chosen. Thank you."

Conservative lawmakers have increasingly called on Truss to step down after she was forced to junk most of her economic programme which when delivered on September 23 sent the pound and government bond markets tumbling.

She drafted in former health minister Jeremy Hunt as her new finance minister to try to reset her administration, but on Wednesday her lawmakers turned on each other and another senior minister resigned, leaving Truss's authority in tatters.

Conservative lawmakers say her most likely successors are either her leadership rival, former finance minister Rishi Sunak, or Penny Mordaunt, who came third in the race to become the next prime minister just six weeks ago. (Reuters)