The UK economy has officially contracted. GDP fell by 0.3% in the last quarter. The culprit? The spiralling conflict with Iran. Whitehall sources confirm the Treasury is in crisis mode. Manufacturing output collapsed. Supply chains snapped. The City is rattled. This is not a blip. This is a structural shock.
Cabinet ministers are in open revolt. Defence and Trade Secretaries locked in a bitter turf war over damage control. Number 10 is spinning furiously. But the numbers don't lie. Business investment has dried up. Exports to the Gulf are down by a fifth. And the cost of borrowing is climbing.
Sources inside the Bank of England whisper that rate cuts are off the table. Inflation is stoking. The war is a perfect storm. Our military entanglement in the Middle East is bleeding the economy. Backbench MPs are sharpening their knives. A no-confidence letter is being drafted.
The PM's approval rating has tanked. Polls show Labour opening up a double-digit lead. ‘Project Fear’ is back, and this time it's real. The question now is not whether the economy will recover, but how deep this recession will go.
This is Eleanor Rigby, Political Bureau Chief, for Westminster Insider.
