Before the 2010 general election Guido had a sense that we were heading towards coalition government, stuck his neck out, and called it a month before the election. Reading the runes again it seems to Guido increasingly likely we are looking at a one-term Tory-led government.

Right now the bookies favour no overall majority, polls suggest Labour could be the largest party, in that event the LibDems, probably without Clegg, will in all likelihood support a Labour government.

The primary cause will be the economy, the probability of a double-dip recession is rising. The US economy is in trouble, the Eurozone is in turmoil, growth is faltering at home and abroad. Inflation is out of control, real incomes are actually falling in the UK. By 2015 the answer the electorate will give to Ronald Reagan’s “Are you better off than you were four years ago?” question may well be “No.”

Osborne’s plan was to bear down on the deficit for a couple of years, restructure taxes a little, revolutionise education policy, tinker with welfare to make work pay, give tax cuts in 2013-14 once the fiscal picture was improved and go on to win the Tories a governing majority. In the second term, free of the LibDem drag,  they would really press on with radically remaking government and the Big Society. Alas they may only have one term.

Things are not turning out so well. Osborne may need to have a root around in his desk to find some of Gordon Brown’s old lines about “it started in America” and “global economic downturn”. Osborne’s hawkishness on the deficit is being rewarded by the international bond markets, but there is little he can do about international demand. US confidence has been shaken up by the downgrade and even German GDP growth was only 0.1% last quarter, Europe may well go into recession within a year, assuming the continental banking system doesn’t collapse next week. None of this will enhance Tory election prospects.

It gets worse for Downing Street; Andy Coulson could be in the dock the year before the election, or worse still, in jail. This will of course tarnish Cameron and Osborne. There is also the possibility that Coulson, as well as other News International figures, could sing about matters that would be excruciatingly embarrassing for the Tories. Osborne, who was really responsible for getting Andy Coulson his job, will be in a particularly uncomfortable position, perhaps even more so than Cameron. Coulson knows where the bodies are buried…