UK Prime Minister Liz Truss resigns after failed budget and market turmoil

Prime Minister Liz Truss announces her resignation at 10 Downing Street on October 20, 2022 in London, England.

The Conservative Party revolted against the Prime Minister after the failed tax-cutting budget.

"We set out a vision for a low-tax, high-growth economy that would take advantage of the freedoms of the UK leaving the EU."

I can't deliver the mandate on which I was elected by the Conservatives. The leader of the Conservative Party spoke to the King to announce his resignation.

The leader of the party is due to be elected within a week. Graham Brady told reporters that he was looking at how the vote could include Conservative MPs and the wider party members.

She was the shortest serving prime minister in British history. Government business was paused for ten days after Queen Elizabeth II died.

Her resignation came after a meeting with Brady, who chairs the 1922 Committee which can submit letters of no confidence in the prime minister.

Reporters were told before the meeting that the prime minister wanted to stay in office.

The number of MPs calling for Truss to step down increased during the meeting. By Thursday, it was reported that over 100 letters had been written to Brady expressing no confidence in him.

An hour after the announcement, the pound was up 2.5% against the dollar, reaching a session high. It is still at the level it was before the budget was enacted. After the speech, the yields on 30-year, 10-year and five-year gilts were down.

Labour, the Scottish National Party and the Liberal Democrats called for an election. Keir Starmer said that the Conservatives no longer have a mandate.

A mini-budget was announced by the finance minister on September 23, which started a period of turbulence for the U.K. bond markets. Jeremy Hunt reversed most of the policies three weeks later.

Sunak is one of the favorites to become the new leader of the Conservatives.

The budget update on October 31 is uncertain, but the leadership handover will ensure we remain on a path to deliver.

Paul Dales said the new PM would need to do more to regain the trust of financial markets.

He said that fiscal policy has changed from being loose to being tight in a few weeks.

There is a downside risk to our forecast that the economy will enter a recession with a peak-to-trough fall in GDP of 2%.