Liz Truss has dramatically resigned as prime minister after just 45 days in the job.
The PM said her successor will be elected in a Tory leadership contest, to be completed in the next week.
Tory MPs urged Ms Truss to go after her government was engulfed by political turmoil, following the ditching of most of her economic policies.
Ms Truss was elected by the Tory membership in September, but she lost authority after a series of U-turns.
In a brief speech outside Downing Street, Ms Truss 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.”
Labour leader Sir Keir Starmer and other opposition parties called for an immediate general election following Ms Truss’s resignation speech.
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.
Jeremy Hunt – who was appointed chancellor last week – has said he will not stand in the leadership contest to be the next prime minister.