Donald Trump’s war on Iran risks triggering a global recession, the International Monetary Fund has warned in the latest damning assessment of the conflict’s impact on the world economy.

The influential financial body said the international outlook had “abruptly darkened” as a result of the war, which threatens to throw the global economy “off course” and could cause an energy crisis on an unprecedented scale.

As oil and gas prices continue to rise, a worldwide recession could be a “close call” in a severe scenario in which there is further turmoil, the body warned.

Of the major economies, the UK faces the biggest hit to growth, with forecasts slashed for the next two years. In a further blow to Sir Keir Starmer, the IMF warns that inflation and unemployment will also rise.

Donald Trump has repeated his criticism of Nato for not joining in his war on Iran, writing in a post on Truth Social that “NATO wasn’t there for us”, adding: “And they won’t be there for us in the future”.

The US president has stepped up his criticism of the 32-member bloc in recent months and accused members of failing to meet their obligations.

Nato’s founding treaty states that countries are required to come to the defence of any member if it is attacked – such an obligation does not apply to offensive operations.

The Iran war is “very close” to ending, according to President Donald Trump, with peace negotiations expected to continue later this week.

“I think it’s close to over, yeah. I view it as very close to being over,” Trump told Fox Business anchor Maria Bartiromo in an interview the network plans to release in full Wednesday morning.

“If I pulled up stakes right now, it would take them 20 years to rebuild that country. And we’re not finished,” he added. “We’ll see what happens. I think they want to make a deal very badly.”

Asian stocks climbed to their highest level in six weeks on Wednesday and oil prices extended their decline below $100 a barrel after Donald Trump said US-Iran peace talks could resume in Pakistan within days, calming markets rattled by weeks of conflict-driven volatility.

Mr Trump said negotiations could restart in the next two days after weekend talks collapsed, prompting Washington to impose a blockade on Iranian ports.

Pakistani and Iranian officials also said that negotiations could restart.

The signs of renewed diplomatic engagement pushed Brent crude futures down 0.7 per cent to $94.13 a barrel, having already slumped almost 5 per cent overnight.

The head of the UN’s nuclear watchdog says the length of a moratorium on Iran’s uranium enrichment was a “political decision”.

IAEA director-general Rafael Grossi was speaking after talks between American and Iranian officials ended without an agreement, with key differences including how long Tehran would be prohibited from enriching uranium.

The US and ​the West ‌are concerned that Iran could use enriched uranium to ⁠build nuclear weapons, while Tehran says it is needed for its nuclear energy programme.

US president Donald Trump ⁠told ABC News ⁠he was ⁠not thinking about ​extending ⁠the ‌ceasefire with Iran.

“It could ‌end either ‌way, but ⁠I think a deal is preferable because then they can ‌rebuild,” Trump said.

Oil prices fell for a second day this morning on expectations peace talks between the US and Iran may resume and eventually release supply from the key Middle East producing region trapped by the closure of the Strait of Hormuz.

Brent crude futures fell 52 cents, or 0.55 per cent, ​to $94.27 a barrel after falling 4.6 per cent in the previous session.

US West Texas ​Intermediate crude was down $1.04, or 1.1 per cent, to $90.24 after dropping 7.9 per cent the session before.

US president Donald Trump has escalated his war of words with Pope Leo XIV through his latest post on Truth Social.

In a midnight post, Trump wrote: “Will someone please tell Pope Leo that Iran has killed at least 42,000 innocent, completely unarmed, protesters in the last two months, and that for Iran to have a Nuclear Bomb is absolutely unacceptable.

“Thank you for your attention to this matter. AMERICA IS BACK!!!”

Trump has been routinely targeting the Pope after he criticised the US president’s war on Iran. Pope Leo had earlier said that Trump’s warning that an “entire civilization will die tonight,” in reference to Iran, was “unacceptable”.

The pope has also suggested that a “delusion of omnipotence” is fueling the war between the United States and Iran.

Since then, Trump has branded Pope Leo as “weak” on crime and “terrible” on foreign policy, before uploading an AI-generated image of himself dressed as Jesus. The US president later deleted the image and claimed it depicted him as a “doctor” and not as Jesus.

A US official said the strategy is to observe vessels subject to the blockade leave Iranian facilities and clear the Strait of Hormuz before intercepting them and forcing them to turn around.

The official told the Associated Press that the military relies on more than just automated tracking beacons that all merchant ships are required to carry, called AIS, to determine that merchant ships were coming from a port in Iran but wouldn’t go into more detail, citing the need for operational security.

Lebanon and Israel held their first direct diplomatic talks in decades in Washington following more than a month of war between Israel and the Iran-backed Hezbollah militant group.

US secretary of state Marco Rubio, who was a part of the talks, called it a “historic opportunity” but made clear that no breakthrough agreement would happen right away.

Israeli ambassador to the US Yechiel Leiter hailed what he called a convergence of opinion about removing Hezbollah’s influence from Lebanon, saying he was encouraged by a “wonderful exchange”.

Nada Hamadeh Moawad, the Lebanese ambassador to the US, “reaffirmed the urgent need” for an end to the Israel-Hezbollah conflict, “underscoring the principles of territorial integrity and full state sovereignty”.

At least 2,124 people have been killed in Israeli strikes in Lebanon, the country’s health ministry said. More than 1 million people are displaced.

The deadliest day of the war took place last week, when Israel launched 100 airstrikes across Lebanon in 10 minutes, including in the heart of the capital, killing over 350 people.