Noise Cancelling with Neil Woodford

UK inflation is falling while oil is up 35% and gilt yields are at an 18-year high. Neil Woodford explains why the 4-5% inflation forecasts are wrong again, what is actually in the CPI basket, and why the bond market may be pricing the wrong story.
The Telegraph says British inflation hits 4-5% by Christmas. The Bank of England, the City and the academic economists said the same thing in March, when oil was $120. July came in at 2.9%, food inflation at 1.3%. In this episode Jon Adair argues the inflation surge case as hard as he can and Neil Woodford takes it apart leg by leg: the energy shock and the price cap, food, second-round effects and wages, and the bond market.
Neil puts a number on December inflation and explains why most of it is already written. He covers why gas and electricity are 3% of the basket (half what they were in the 1980s), why 55% of the pump price is tax, why UK pay growth at a six-year low means there is no wage spiral, and why the gilt market is following US Treasury yields rather than a UK inflation problem. Then the bigger question: is this a new inflationary age, or the start of a period of disinflation driven by energy supply, China and AI? And if he's wrong, what happens.

Is the UK's productivity crisis actually real? The ONS has quietly admitted its Labour Force Survey overstated UK employment, and the HMRC tax data tells a completely different story about the UK economy, your taxes and interest rates.
In this episode, Neil Woodford explains what the tax records really show about UK productivity, why the official survey invented half a million workers who don't exist, and how one wrong number fed both the OBR forecast that drove Rachel Reeves' tax rises and the Bank of England's view of how fast the economy can grow before rates must stay high.
We also get into the collapse in graduate jobs and what it says about AI adoption in the UK, whether Britain's productivity has genuinely accelerated since 2024, and how the UK really compares with the G7. Stay to the end for what a correction means for the November Budget, mortgage rates, gilts and rate-sensitive UK stocks, and where Neil sees the opportunity.
Read Neil's full written analysis
Neil's first piece on this from 2024

Neil Woodford has been answering questions about investing for 35 years – and every one of them comes down to seven decisions. In part one of this three-part series, Neil and Jon Adair cover the funnel: the three decisions that take you from every company in the world down to a shortlist worth owning.
You'll learn why reported profit tells you almost nothing about whether a business is any good, the only three numbers Neil would keep if forced to choose (PE, debt to EBITDA, and return on capital employed), how to judge a moat and a management team, and why Neil calls valuation "an educated, informed guess" – and means it as a compliment.
Part 2 covers position sizing and portfolio construction. Part 3: when to sell, and how to hold your nerve. Subscribe so you don't miss them.
Read the framework:
The Seven Decisions, Explained – every piece on Noise Cancelling is tagged to the decision it belongs to: 
The Noise Cancelling app is free to join, and it will read Neil's pieces to you: 
This video is for information and education only. It is not investment advice, and nothing in it is a recommendation to buy or sell any investment. Capital is at risk. Seek independent financial advice before making investment decisions.

Britain's housing crisis is a myth. Neil Woodford has run money for over 35 years, and in this episode he tests the UK housing market's most repeated story against 55 years of data: mortgage payments as a share of take-home pay are close to their long-run average, buying costs less per month than renting the same home, and real house prices have been falling for five years.
So why can't young people buy? The average first-time buyer was 23 in 1960 and is 34 today. The answer is not affordability. It is a banking rule written after the financial crisis: capital requirements that make high loan-to-value mortgages uneconomic for banks to write. Nobody banned the 95% mortgage. It died of unprofitability, and UK mortgage approvals have run 40% below normal for 15 years.
Then the investment question. Housebuilders trade at roughly 70p per pound of assets while the banks have re-rated back above book. Is the market right about the builders, or is it pricing a suppressed market as a dead one? Neil gives his position, what would change his mind, and what he is watching: the regulator's decision on loan-to-income caps, due within months.

Is UK wealth inequality actually rising? Wes Streeting calls inequality "the fracture running through modern Britain", and the coming budget leans on the same story. Neil Woodford has spent weeks in the data, and it says something very different.
In this episode, Neil and Jon work through what the official numbers show: the top 10 percent's share of British wealth was 56 percent in 1980 and 57 percent four decades later, flat through the biggest asset boom in the country's history. They explain why compounding means wealth gaps should widen automatically, and what cancelled it: the occupational pension revolution, faster pay growth at the bottom, and a tax system where the top 1 percent of earners now pay 28 percent of all income tax.
Then the measurement problem. The gap between Britain's richest and poorest fifth is 12 to 1 before taxes and benefits, and 3.3 to 1 after. Same country, same year, same statisticians. Which number you get quoted depends on who is quoting it.
Finally: does inequality actually damage growth? Neil's answer, and what it means for the tax rises now being floated ahead of the budget.

The UK has announced $59 billion of data centre investment since 2023, and the National Grid cannot power it. 140 data centres are sitting in the connection queue asking for 50GW; the UK's peak demand this year was 45GW. In this episode of Noise Cancelling, Jon explains how the grid connection queue actually works, and Neil Woodford explains why he believes this is an energy policy failure decades in the making.
We cover the three things that make the queue unfixable on current policy: connection waits stretching past 2035, why no large gas plant has been built since 2016, and why industrial electricity in the UK costs four times what it does in the US. OpenAI has already put its UK Stargate project on hold.
Then the investor question: if announced capacity is not delivered capacity, where does the capital actually have to go first? Transmission, grid supply chains, nuclear including SMRs, and gas peaking. Watch the queue, watch Ofgem reform, and watch which hyperscale campuses actually break ground.

Neil Woodford says UK interest rates are heading below 3% next year, and the new Prime Minister has almost nothing to do with it. The consensus says Britain has a structural growth problem. The data says something different: the UK economy is waiting on one number.
In this episode, we explain who actually buys Britain. Households account for roughly 60p of every pound of UK GDP, and since the pandemic, they have been saving at nearly double the American rate. British banks now hold over £500 billion more in deposits than they have lent out. That savings mountain, not Westminster rhetoric, is what decides whether Britain grows.
Neil explains why the Bank of England's sticky inflation fears have been wrong all year, why the household savings ratio is the single most important number in the UK economy, and where inflation and interest rates land over the next 12 months. Plus: the sectors that look mispriced if he's right, and the data releases that would confirm the view or kill it.

Neil Woodford on the war the market refuses to price. Missiles are hitting the Gulf, America is back at war, and the S&P 500 finished the week up 1%. The institutions that modelled this conflict predicted catastrophe. The market looked at the same war and said no. One of them is wrong.
Jon and Neil unpack the biggest forecasting failure since Brexit: how the IEA, the Bank of England and the EIA all got the oil shock wrong, and how the market repriced the war line by line while the models stood still. Neil explains why complex economic models fail structurally, what he uses instead (one number, no model), and the scenarios that would prove him wrong, from a Bank of England rate rise to the closure of a second strait.
🔗 Links & Resources
Read Neil's companion piece, Truth Is Ever to Be Found in Simplicity: 
The Noise Cancelling app, new this week: https://apps.apple.com/app/id6784789879 
Visit https://www.noisecancelling.co/apps for more information
About The Noise Cancelling PodcastNeil Woodford and Jon Adair cut through financial noise: what moved, what it means, and what would change their minds.
Hosts: Neil Woodford, Jon AdairWatch on YouTube: https://www.youtube.com/@ncwithnw 

UK stocks are being taken private at a record pace: this year, takeover bids for London-listed companies have run at roughly £60bn against under £600m raised in new IPOs, and Neil Woodford argues that this wave of M&A is the clearest sign in years that UK equities are undervalued. In this episode, Woodford and Jon Adair break down why the FTSE and London stock market trade at such a deep discount to the US, what a 75% takeover premium reveals about UK share prices, whether British stocks are cheap or a value trap, and where Woodford sees value across UK banks, oil and housebuilders.
We posted a companion explainer on the cyclically adjusted PE ratio – what CAPE is, why the US reading of 42x matters, and how to read it: https://www.noisecancelling.co/read/what-the-shiller-cape-tells-you-about-the-next-ten-years 
 

Oil hit $144 a barrel in April, the highest price ever paid for physical crude, and underlying inflation barely moved. This week, Neil Woodford explains why the oil price doesn't work the way most people think, and why three central banks tightened into a shock that was already reversing.
Jon and Neil mark Neil's December calls honestly (the wins and the misses), then get into the mechanics: why paper barrels set the price, not physical ones; the difference between headline and core inflation; and the base effects that mean the inflation number scaring central banks is about to fall on its own.
Then the mistake. The ECB raised rates the day before the peace process went public. The Bank of Japan gets Neil's sympathy as the one bank tightening into genuine wage inflation. And in Washington, new Fed chair Kevin Warsh has picked headline inflation as his fight; Neil takes the 4.2% apart and explains why the September hike never arrives, and why the Bank of England may cut before year-end.
Neil also names the one number that would prove the whole call wrong.