Your friends have seen them together, and you can't deny the truth any more: he and that sour-faced little cretin with a face like a horse are an item. He's not "on a break": he left you for someone else. It's a hard one to swallow.
Questions you need to ask yourself
Did you see it coming? Why are you upset: it is because you're not together any more or because she's taken your place? Is she really the one to blame?
What you can learn from it
Being left for another woman can sometimes be more of a personal insult than standard heartbreak. Or maybe she's just new and different, and he needs a change - i.e. it's nothing to do with you? Either way, it's hardly a pleasant situation to be in. Remind yourself of all his faults and bad habits - you might even start to feel sorry for her!
Don't forget: it's better to know where you stand than to be the 'rebound girlfriend.' Don't focus on his new girlfriend - it could develop into an unhealthy obsession, and it won't help you. She's the 'symptom' of your relationship problems, but not the cause...