A prolonged war could do calamitous damage to the global economy.

Iran war latest: Netanyahu predicts timeline

In just one day and night, Iran has hit energy targets in Saudi Arabia, Qatar, Kuwait and Israel. So much for its military being defeated, or its leadership decapitated after almost three weeks of bombardment.

One attack alone, on the Ras Laffan gas plant in Qatar, using just a handful of missiles, did an estimated $26bn worth of damage and will, we're told, take years to repair.

Even less liquid natural gas will now get to market, jacking up prices. The cost of gas for European consumers has already leapt 30%.

Cue a pell-mell chorus of apocalyptic predictions from analysts and economists, and that's after just 24 hours of escalated energy attacks. Imagine what weeks of the same could do.

I sat down with one of Iran's most senior diplomats, Esmail Baghaei, in the foreign ministry in Tehran to ask him if this was a new policy of escalation from his government.

"You cannot expect a country that is under military aggression to exercise restraint. You have to direct your call to those aggressors, they started this…" he told me.

Oil and gas facilities have been hit before in this war, but the targets struck over the last day or two are of a different order of significance.

The attacks were not unprovoked. Israel had taken its attacks on the Islamic Republic to a new level with airstrikes on Iran's south Pars gasfield and Iran responded without hesitation.

No wonder Donald Trump issued what looked like a rather panicky post ordering Israel not to attack gas fields again and warning Iran against the same in no uncertain terms.

I asked Mr Baghaei if rising concern globally would provide some opportunity for diplomacy to prevail and for all sides to step back. Is there any kind of olive branch Iran could offer to its enemies?

"Do you think it would be realistic to offer an olive branch to those who want to behead you? They are killing our elites. They are targeting our leaders. We are facing acts of aggression and terrorism and this is unprecedented," he said.

But the US president is also reported to be seriously considering sending in troops to secure the Strait of Hormuz. That would raise the spectre of weeks, if not months, more war.

If Iran can maintain the potency of its missile arsenal that could spell disaster for the Gulf's precious energy installations with all that means for the global economy.

It would be as wise as a shootout in a warehouse of crystal.

The prices of oil, gas, helium, plastics and fertiliser have been sent soaring already. But we may have seen nothing yet and if the doomsday scenario unfolds as predicted we will all feel the pain.

Viktor Orban, the right-wing prime minister in Budapest, has been a constant critic of the bloc's commitment to supporting Kyiv and is seen as one of Vladimir Putin's closest allies in Europe.

His country is a member of the EU, and he has been accused of undermining the bloc's position on the war.

Brussels agreed a deal worth €90bn in December to help Kyiv keep fighting for up to two more years, but Mr Orban is blocking the money from being provided.

Speaking after a summit on Thursday, German Chancellor Friedrich Merz accused him of an act of "gross disloyalty", while the European Council's president, Antonio Costa, said his opposition constituted "blackmail".

How is Orban blocking the money?

The implementation of the interest-free loan requires unanimity among the EU's 27 member states.

Ukraine's allies within the bloc had been keen to show they're serious about stumping up big money to help due to America's waning support under Donald Trump. The US had been a major provider of aid under Joe Biden.

Mr Orban has justified blocking the €90bn package by citing a dispute over a pipeline damaged by the war. It carries Russian oil through Ukraine to Hungary and Slovakia.

Kyiv and Brussels say a Russian attack in January was the cause of the damage, and it will take another six weeks to repair. Hungary claims it's already functional and accuses Kyiv of withholding the oil.

Mr Orban posted on X following the Thursday summit: "As long as Zelensky ‌does not lift the oil blockade, they will not receive any money from Brussels."

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What happens now?

Some in the EU hope Hungary will change its position once the pipeline is repaired, or following the country's election next month.

Mr Orban has been prime minister since 2010 and is seeking another term in office. Mr Trump has endorsed him.

But Germany's Mr Merz has suggested the European Commission look into whether the loan can be implemented without relying on Budapest, which has already been excluded from even having to contribute towards the costs.

Zelenskyy says loan is 'critical'

EU officials have warned Kyiv could run short of cash within weeks without the loan. Volodymyr Zelenskyy said the money was "critical" for his country's war effort.

"It is a resource ​to protect lives," he told EU leaders in a video address.

Without foreign aid, Ukraine's government would likely have to start cutting spending on things like pensions, public sector wages, and welfare in order to keep funding defence.

The debt burden is rising, squeezing young workers as they approach their earning prime.

With around five million people affected, the backlash is likely to grow from next month, when borrowers get the final slice of inflation-linked relief from payments before a three-year freeze on the earnings threshold kicks in, following its announcement by Rachel Reeves in November.

Here, Sky News explains the problems, who is affected and what options there may be to help resolve the difficulties.

Where the problem began...

At the heart of the controversy are Plan 2 student loans, introduced in 2012, when maximum annual tuition fees tripled to £9,000. They were offered until 2023.

Around five million students have a Plan 2 loan and the scheme accounts for around 80% of the £240bn student loan book in England.

Repayments are collected like tax and set at 9% of income above an income threshold - just over £29,000 from April.

Interest accrues on the outstanding debt at the rate of the RPI measure of inflation (not the usually cheaper CPI favoured in other calculations by government), currently 3.2% plus up to 3%, depending on income - far more expensive terms than the previous Plan 1 loans.

After 30 years, if the debt is not cleared, the balance is written off.

Have we not been here before?

As well as being more expensive, Plan 2 terms have been repeatedly changed in recent years. Boris Johnson's government added the extra 3% to RPI in 2022 and froze thresholds, which, after a brief thaw, Ms Reeves has reimposed.

Why the earnings threshold?

The point of the earnings threshold, and what makes a student loan different from standard borrowing, is to protect lower earners from having to make repayments before they can afford to. By freezing the threshold, the chancellor has increased repayments for all borrowers.

The Institute for Fiscal Studies (IFS) calculates that lifetime loan repayments will rise on average by £3,000, with lower earners worst affected, facing increases of up to £5,000, while the highest earners pay just £700 extra.

The big problem...

Even when they begin repayments, the reality for most borrowers is that the outstanding loan grows far faster than they are able to repay it. Last year, £15bn in interest was added to the loan book against £5bn in repayments.

Unlike a bank loan, where the duration and total repayments can be fixed, student loans are highly variable and depend on personal circumstances. Two people borrowing the same amount of money can repay vastly different amounts over the course of a career.

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It isn't working for anyone

Rethink Repayments, a campaign group that has proposed radical changes to the system, has modelled various repayment scenarios that demonstrate how widely circumstances vary.

In their models, a low-earner who borrows £43,000 and starts on an annual salary of £15,000, rising to £85,000 over the course of their career, will repay just £36,000. Their outstanding debt, meanwhile, will have ballooned, with more than £100,000 written off.

A medium-earner who takes the same £43,000 loan but has a salary of £21,000, rising to £110,000, will repay about twice as much, more than £70,000. They only start to bring the total debt down after 25 years, and £90,000 would be written off.

Someone with a salary rising from £27,000 to £142,000 will repay more than £120,000, four times the low-earner, on the same £43,000 of borrowing, and even they will not clear the debt entirely.

The challenge of lowering a loan balance is illustrated by the fact a graduate who starts their working life with the average student debt of £53,000 has to earn £66,000 before they repay more than they are charged in interest.

The "graduate tax" repayment mechanism also lands borrowers with punishing marginal tax rates. When they pass the initial earnings threshold they face a marginal rate of 38%, with the 9% loan deduction indeed to income tax and PAYE.

When earnings pass £50,000, the threshold for the higher income tax rate, Plan 2 borrowers face a marginal rate of 51% once the loan deduction is taken, meaning they keep less than half of every extra pound they earn.

Add that to far steeper housing and childcare costs than their parents' generation, and little wonder graduates who thought a degree might open a path to a prosperous future are feeling squeezed and aggrieved.

The government is not giving ground yet

While the chancellor has defended her changes as "fair", the prime minister said last month that the government would look at ways of making the loan system "fairer".

The Treasury has not given guidance on the progress of any review, and it is unclear where the issue sits in the list of political priorities.

What changes could be made?

Both main opposition parties have suggested changes. The Conservatives want to revert to RPI without the additional 3%, a move that would not cut repayments now but would reduce lifetime contributions, at a cost to the Exchequer the IFS estimates at £3bn.

The Liberal Democrats, long burned by the reversal of their opposition to tuition fees when in government, would increase the threshold by average earnings, lowering repayments in the short and long term, at a cost of £4bn.

Rethink Repayments wants the threshold restored, to switch the interest rate from RPI to CPI, and cut the repayment rate to 5%. That would drastically reduce lifetime payments and costs and, by the IFS's calculation, cost around £11bn.

Any of these changes would ease some of the pressure on borrowers and constitute another U-turn, but none of them would wish away the fundamental challenge of higher education funding.

Plan 2 loans may feel iniquitous but they are operating exactly as designed. They put the burden of paying for a degree on the beneficiary, rather than non-graduate taxpayers, and link repayments to earnings.

With many universities running deficits and overseas students underwriting domestic tuition fees that are already too low to cover the cost of teaching, the university sector needs someone to pay its way.

Sky News had highlighted how local people in Bickershaw, near Wigan - whose homes have been infested with rats because of the waste - said they felt abandoned by the Environment Agency.

That followed the government setting aside £9m for clearing up a similar-sized waste site in Kidlington, Oxfordshire.

The decision to clear waste from sites in Wigan, Sheffield and Lancashire is part of a major raft of measures from the Department for Environment, Food and Rural Affairs (DEFRA) and the Environment Agency.

It describes the plans as its "toughest ever crackdown" on waste criminals.

"Waste criminals have been damaging our communities, countryside, environment and economy for too long. This action plan sends a clear message: dump illegally and you will face the full consequences," said Secretary of State for the Environment, Food and Rural Affairs, Emma Reynolds.

The 10-point plan unveiled by the Environment Agency includes plans for faster intelligence handling, a more consistent and quicker response to dumping reports, and naming and shaming operators involved.

Sky News was given exclusive access to a new drone squad - part of the latest measures - which are equipped with lasers, thermal imaging and cameras to help gather evidence and spot illegal waste dumps.

James Burton, who is one of the 33 new pilots, said: "It can be used very effectively for evidence gathering, the photographs we can take from the sky.

"It paints the picture of the significant level of impact this has had on the countryside and it enables us to better sell the story to a jury and the judge."

Steve Molyneux, the Environment Agency director of environment and business, said the agency is committed to tackling organised criminals behind waste crime.

He said: "My message to the criminals is we'll be working with our partners at the police, HMRC and local authorities and we'll all be bearing down and coming after you."

He also said officials want to get to sites sooner, before dumping gets out of hand: "As soon as we're in there, we can use things like restriction orders to stop activity virtually immediately on site, so the more we can work with people to get that early detection the more we can work on prevention."

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Earlier this week, DEFRA announced plans to create so-called "clean-up squads" - with fly-tippers given conditional cautions by local authorities, making them clear up waste unpaid for up to 20 hours.

It also revealed that EA officers will be given new police-style plans to intervene earlier and seized assets and search premises without a warrant.

Reacting to the announcements, Baroness Sheehan, chair of the House of Lords Environment and Climate Change Committee, said she welcomed the measures but that the devil is in the detail.

She said: "As our initial inquiry found, the Environment Agency has had sufficient powers in the past to stop the illegal dumping of waste across the country but has failed to use them.

"The apparent additional enforcement powers and budget afforded to them today means it is time for them to step up to the plate.

"The Committee looks forward to questioning Philip Duffy, the chief executive of the Environment Agency, next week about how he plans to deliver effective regulation and enforcement."

Speaking to Sky News' political editor Beth Rigby on the Electoral Dysfunction podcast, the veteran Labour peer said Ms Rayner had offered just "one criticism after another" rather than "positive proposals".

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"It's so easy to be popular when you are not in the hot seat, and whoever took over from Starmer would face all the same problems," Baroness Harman said.

In a speech at an event hosted by campaign group Mainstream on Wednesday, the former deputy prime minister warned Labour was "running out of time".

"I'm a big fan of Angela Rayner. I think she's a remarkable woman. I think she energised the party when we were in opposition building up into government," Baroness Harman said.

But speaking about Ms Rayner's speech on Wednesday evening, she added: "It didn't have any proposals about what should be done.

"I just don't think she should be doing this. I think it's wrong for her and it's certainly wrong for the party and the government.

"It's the sort of things that are said by Nigel Farage, by Kemi Badenoch, by the Greens, by the Lib Dems.

"I think it's best for you to come forward with positive proposals rather than just criticise a government, which is dealing with a very difficult situation."

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'Is she saying immigration doesn't matter?'

Baroness Harman also said the former deputy prime minister should not "wave" immigration "away" as an issue.

"The other thing that I would take issue with Angela Rayner on this is that immigration is now, if you look at the opinion polls and just listen on the doorstep, it's the second most important issue to people after the cost of living," she said.

"To just wave it away as an issue and say it's un-British to exercise extra controls… what is she suggesting instead?

"Is she saying it doesn't matter that people are concerned about immigration or this is the wrong policy and we should be trying something else?" Baroness Harman said.

"It's just a negative intervention."