Liz Truss walks back into 10 Downing Street after making a statement where she announced her resignation as Prime Minister in London on October 20, 2022. (Photo: AP)

The Conservative Party, which holds a big majority in parliament and need not call a nationwide election for another two years, will elect a new leader by next Friday.

That contest is likely to pit ex-finance minister Rishi Sunak against Penny Mordaunt, but could also see the return of former premier Boris Johnson, who was ousted in July when his ministers resigned en masse to force him out of power.

Speaking outside her office, Truss accepted that she had lost the faith of her party and said she would step down next week, becoming the shortest-serving prime minister in British history.

Appointed on Sept. 6, she was forced last week to sack her finance minister and abandon almost all her economic programs after their plans for vast unfunded tax cuts crashed the pound and UK bonds.