UK Prime Minister David Cameron to stand down on Wednesday

PM with media

David Cameron has announced he will stand down as U.K. prime minister on Wednesday this week. He will be succeeded as prime minister by Theresa May.

Cameron will hold Prime Minister's Question Time for the last time on Wednesday at 7 a.m. ET. He will then go to Buckingham Palace to offer his resignation to the Queen.

Theresa May will then go to the palace to "kiss hands" with the Queen. She will become the U.K.'s second female prime minister after Margaret Thatcher.

The Conservative Party Conservative has confirmed as the winner of the party's leadership contest, according to Reuters.

The news seemed to have assured markets of some modicum of stability ahead for the U.K. Sterling reached a session high above $1.30 afterwards.

This came after U.K. lawmaker Andrea Leadsom announced she was pulling out of the race to become the new leader of Britain's ruling Conservative Party. The announcement left Interior Minister May as the sole candidate for the job.

Speaking earlier on Monday, May said there would be no second referendum or backdoor attempts to rejoin the European Union and pledged to set out economic plans to deal with the current instability.

While there was some speculation May would have to be challenged by a secondary candidate in the final Conservative leadership vote, the chairman of the relevant Conservative party committee said there was no need to re-run the contest, according to Reuters.

The chairman added that members would understand the importance of moving forward in the national interest.

It was initially expected that the leadership race would end with the new British prime minister being confirmed at the start of September.

Addressing reporters after pulling out of the race, Leadsom said: "There is no greater privilege than to lead the Conservative Party in government and I would have been deeply honored to do it."

"I have however concluded that the interests of our country, are best served by the immediate appointment by a strong and well supported prime minister. I am therefore withdrawing from the leadership election," Leadsom said.

Dominic Bryant, head of U.K. economics at BNP Paribas, said this decision had likely been made after intensive discussions within the party with the aim of avoiding a two-month period of uncertainty during which the government would have been "largely rudderless, with potential negative spillover effects on the economy."