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.

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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.