After months of Labour MPs despairing over Starmer, the question of his continued leadership erupted spectacularly this when Downing St staffers briefed that he would dig in and fight against any attempt to roll him.

It was a debacle. Far from looking stronger, Starmer denied any knowledge or authorisation for briefings and apologised to his Health Secretary, Wes Streeting, who was fingered as positioning to replace Starmer.

Alastair Campbell, the high-profile spin doctor for former prime minister Tony Blair, said support for Starmer was rapidly “draining away” and the government had no compelling narrative.

“There are bigger, worse enemies – like Nigel Farage, who if we are not careful [is] going to come in and take over this country and take it to a very dark place,” Campbell told the BBC.

The own goal comes as the government struggles with myriad policy issues, ranging from the unyielding arrival of small boats carrying migrants across the English Channel, a prison system where dozens of inmates have been mistakenly released early, knife crime, an ambitious energy transition jacking up power prices and a doctors’ strike.

But the biggest headache remains the economy, with a budget due in less than a fortnight.

Evidence of the poor state of the UK economy was highlighted this week with unemployment hitting 5 per cent, its highest level since the Covid pandemic. Growth for the September quarter was a glacial 0.1 per cent.

Chancellor of the Exchequer, Rachel Reeves is being pulled in different directions, some of it her own making.

She is facing a funding shortfall of up to £30 billion ($60 billion). Like Australia, the UK is suffering from stagnant productivity growth, which is hitting revenue forecasts.

To plug the gap, Reeves has been laying the groundwork to increase taxes, although late on Thursday it was reported she had climbed down on raising the headline income tax rates to avoid a backbench revolt over breaking an election promise. At the same time, she has signalled there will be energy bill relief as well as an easing of the two-child cap on welfare benefits to appease backbenchers, adding billions in new spending.

Reeves has also insisted there will be no easing of her fiscal rules to bring the budget back to balance and reduce the ratio of debt to GDP by 2029, which she argues are necessary to maintain the confidence of financial markets.

“In order to meet the fiscal rules, they’ve got to do something either raise taxes or cut spending and it’s clear their choice is going to be to mainly raise taxes,” says Oxford Economics senior economic advisor Michael Saunders, a former member of the Bank of England’s monetary policy committee.

“Growth is modest. Potential growth is lower than they thought and they are going to have raise taxes again. That’s a disappointing outlook.

“But it’s not a fiscal crisis. Gilt yields have fallen over the last few months, the pound is fine.”

Saunders says the government in retrospect should have gone harder in last year’s budget to raise taxes “and given themselves more fiscal headroom against the rules”.

Farage has given two speeches acknowledging fiscal reality, over the past fortnight.

Rejecting populism, he scrapped the party’s promise to cut income tax by £90 billion a year, saying it was unaffordable given the current budget.

Farage, who made his fortune in commodities trading before entering politics as an Eurosceptic, also talked up the importance of the City of London’s financial hub to the UK economy, pledged to cut red  tape and axe the commitment to net zero emissions because of its “lunatic cost”.

Coupled with his tough talk on cutting both legal and illegal immigration, the Farage rhetoric is being imitated in Australia on the right-wing side of politics. He presents a template that is less coarse than Donald Trump.

Farage has been wary of the uglier side of the far-right. He has ruled out allowing Tommy Robinson, an anti-Islam campaigner who has a string of criminal convictions and been a driving force behind street protests, from joining Reform. Businessman Elon Musk, who frequently opines that UK society is on the brink of collapse, has branded Farage “weak” and called for his ouster.

Farage has a pretty slick media outfit behind him. He continues to host a show on the right-wing GB News – prompting the government to weigh laws banning serving politicians from presenting TV shows – and boasts seven million followers on social media.

Behind the scenes, Reform is beefing up its policy work. The party only has five House of Commons MPs and none in the House of Lords.

Last week it advertised for analysts to work in the “Reform UK Research Department”. The unit is expected to employ about a dozen researchers initially and while focused on briefings and media, also includes practitioners of the dark arts of dirt digging on rivals.

Queen Mary University of London political professor Tim Bale says, “Farage is trying to prove to several audiences that they have nothing to fear from Reform”.

“He wants to show the markets that he won’t do a Liz Truss and go for unfunded tax cuts” says Bale.

“He wants to persuade potential donors that they won’t be throwing good money after bad. And he wants to squeeze the Tory vote even further than he already has by persuading more liberal Conservatives who haven’t yet flipped that Reform aren’t going to damage their wealth.

“But the idea that he’s going to pivot away from migration is for the birds. Reform own that issue now and he will be banging on about it big time until the next election, don’t you worry!”

Bale is sceptical Reform’s policies will get much scrutiny, with right-wing media outlets unlikely to subject them to a thorough examination if they think he’s going to win.

“Candidates, though, are more of a problem because even the right-wing press finds it difficult to resist stories about extremist oddballs and you can bet Labour’s attack machine will be supplying them with plenty of material,” Bale says,

“Values and vibes are perhaps more important than they used to be, but we shouldn’t get carried away: when it comes to general elections, the cost of living and the state of, and risk to, key public services, especially the National Health Service, still count for an awful lot.”

The nitty-gritty of governing may offer a glimmer of hope for the established parties.

Kent County Council, the largest local authority in England by population with 1.6 million residents, has become a test case of Reform’s ability to govern after it was among 10 bodies captured in May.

Instead, the council has fallen into acrimony. Nine Reform councillors have been booted or suspended from the party since May. Last month a video of the Reform and council leader Linden Kemkaran swearing during a council meeting was leaked.

Promises of a DOGE-style effort to root out efficiencies have fallen short. Kent and other Reform councils are conceding council taxes, which pay for municipal services as well as schools and social services like aged care and public housing, will have to go up, some by the maximum amount of 4.99 per cent.

Anti-racism group Hope Not Hate released this week what it described as the largest study of Reform supporters, polling 11,000 people. The all things to all people appeal of Reform is shown by its ability to win over economically insecure working-class voters in England’s north, and wealthier hardline Tories in the south. Anti-immigration is the unifying factor.

But in the middle are younger voters who support Farage out of political contrarianism, anxious middle income voters who are concerned about immigration but retain notions of fairness, and the persuadable “reluctant Reformers” who are frustrated with the mainstream parties and just want competent government.

The record of parties built around a cult of personality is not flash. But does Farage have the skills for the top job and to rebuild a broken Britain?

Saunders, the economist, is scathing in his assessment, saying Farage has no convictions and is not a serious politician.

“Who knows what he will say tomorrow or next week or the week after,” Saunders says.

“Over the last few years we’ve had Nigel Farage backer of the smaller state, Nigel Farage the backer of big increases in public spending and nationalisation. Then it was big tax cuts and now its no tax cuts. He is trying to be Mister Fiscal Responsibility but has no consistency.

“He is just a grievance stoker and has no genuine solutions.”