# Roundup of the week: 10 October 2025 _Another turbulent week in global politics and markets — from France’s deepening crisis and the US government shutdown to the ONS’s latest data mishap and the ongoing debate around AI market excesses._ Neil Woodford · 10 October 2025 · 7 min read ![Sebastien Lecornu, appointed by President Macron less than a month ago, resigned after his attempts to form a government and a deficit-cutting budget for next year failed. Alexandros Michailidis, Shutterstock](https://cdn.sanity.io/images/v3acfbvo/production/a29b43c4cf9a91ef9260b2e9d2945337569b31a8-6464x4309.jpg?w=1600&fit=max&auto=format) --- **If you think I have missed something you would like to discuss or would like to send in a question for next week's podcast episode,** [**send us an email**](mailto:hello@noisecancelling.co)**.** This week has again brought unexpected political, economic, and financial market developments, the most important of which I will comment on in this round-up. Having said that, some other important economic issues, especially in relation to the outlook for the UK economy, have preoccupied me this week, and I will expand upon them in a longer blog post that should be published in the early part of next week. ## Politics ### France France’s current political crisis took another turn this week when the latest prime minister, Sebastien Lecornu, appointed by President Macron less than a month ago, resigned after his attempts to form a government and a deficit-cutting budget for next year failed. Lecornu is the third PM in the space of a year to resign and reflects the fractured state of France’s legislature, where both the right and left of the political spectrum both appear to oppose meaningful deficit reduction measures. (The deficit this year is likely to exceed 5.4% of GDP) Both ends of the political spectrum also appear to want different things. Marine Le Pen’s party wants new elections, and the far left wants Macron to resign. At the moment, neither appears likely, and according to Lecornu, who has been charged with finding his successor, there is no majority in parliament for new elections. There is, however, a glimmer of hope, following the news that the outgoing premier has apparently found a technocratic successor who will be announced before the weekend. This story will run and run, I imagine, as Lecornu’s successor grapples with the same challenges his three predecessors failed to overcome. ### Middle East Israel and Hamas have agreed preliminary steps for a ceasefire in Gaza and the release of hostages. The deal includes an Israeli withdrawal to an agreed position and the release of 2,000 Palestinian prisoners, amongst other conditions. This appears to be the best hope for an enduring peace settlement since the Hamas attacks of just over two years ago. There are many details to fill in and much more work to be done to secure a stable peace, but this has to go down, as well, as a personal triumph for Donald Trump, who appears to have achieved something beyond all other interlocutors. From an economic and financial market perspective, the deal has had little discernible impact. Interestingly, the oil price rose today. But if this makes the world safer, that has to be good news for everyone, especially for the region. ### US government shutdown The US government shutdown is now in its second week. Although financial markets have pretty much shrugged it off, the longer it goes on, the worse the impact will be, particularly on an already wobbly labour market. Political considerations are also bearing down on both sides, with equal blame being heaped on the Republicans and Democrats. It is also not yet clear which economic data series will be affected, but initially at least, it looks like labour market data will not be released on time this week. On Wednesday this week, there were some positive developments, with President Trump signalling a willingness, apparently, to do a deal with the Democrats, which unfortunately was disputed by the party’s leadership. I imagine whilst Trump was focused on the Gaza peace deal, this may not have been at the top of his list of priorities, but I imagine it will become increasingly important if it drags on too much longer. ## Economics ### UK data (ONS) Hot on the heels of last week’s significant economic revisions, the ONS announced this week that once again it has failed to measure an important data series properly. This time it is VAT receipts, which regular readers might remember I highlighted as probably being wrong when they were released with the public borrowing data for August. The ONS has blamed HMRC for the error, but either way, this once again serves as a reminder that the UK’s premier statistics body is struggling badly to accurately measure what’s going on in the economy. This is obviously serious, given what is about to happen on the 26th of November. In the upcoming budget, consensus appears to believe that the Chancellor will be forced to raise taxes on the back of the OBR’s downgrade to its five-year forecast for productivity growth. Something with the organisation itself believes is an uneducated educated guess. I am not so sure. It would be the height of stupidity to raise taxes today on the back of an OBR five-year productivity forecast whose credibility must be in severe doubt, given that the ONS cannot provide an accurate baseline productivity number. Indeed, the ONS and the OBR have both just upgraded UK productivity data following last week’s 2.25% upward revision to nominal GDP at the end of Q2. There is more on this subject in a longer blog published shortly. ## Markets ### US This week, the number of siren voices warning of a significant and imminent market correction increased. Amongst those sounding warning bells were Andrew Bailey, the head of the Bank of England, the IMF and Jamie Dimon, CEO of JP Morgan. I have talked about this subject in this week’s podcast. In summary, I am not at all persuaded that the US equity market overvaluation, which I have observed on many times, nor the bubble-like characteristics of the excitement around AI, amount to the scale of market excess that, in my view, would prompt an imminent and significant market correction. Somewhat ironically, if the IMF and the head of the Bank of England are alerting investors to this sort of event, you can almost guarantee it isn’t at all likely. Importantly, markets and stocks can correct overvaluation as they have done many times before by delivering poor future returns; this phenomenon does not have to end in a messy market rout. Clearly, there is always the potential for some kind of unexpected event that could spook markets. We had one early this year in April, from which sentiment quickly recovered. But based on what is knowable, I do not agree with these siren voices. One final observation is that the valuation of the leading tech companies in the US, although excessive in my opinion, is significantly below the peak valuations of the leading TMT stocks before the market correction in 2000 and indeed also way below the peak valuations of the Nifty Fifty in the early 1970s. ### UK **I am not alone.** This week, the FT Lex column unexpectedly made the case for “rethinking the negativity around the UK”. The column went on to argue that “Britain deserves a break: its economy is dull, not disastrous” The evidence it cited included, for example: > For evidence that Britain-bashing has gone too far, just look at the GfK consumer confidence survey. It's still in negative territory, as it has been for almost a decade, suggesting respondents think the economy is getting worse. But ask about their own personal finances, and they are surprisingly positive; the index reading is close to pre-pandemic levels. The piece finishes with a comment that I did not expect to read in a leading financial news publication: > Nonetheless, it remains true that sentiment can overshoot at both ends. It could be that the US economy is heading for a period of weakness, despite the claims of corporate cheerleaders. However, there are also positive signs in the UK for those inclined to pay attention to them. Woeful IPOs **At least this Chancellor appears to be taking notice.** I have written on many occasions in the last year or so about the damage regulators and politicians have inflicted on the UK stock market over the last 25 years. This is reflected in the historic underperformance of the UK index and the dearth of UK market IPOs. Embarrassingly, I believe the Angolan Exchange raised more capital so far in 2025 than was raised in the UK. ![Roundup of the week: 10 October 2025](https://cdn.sanity.io/images/v3acfbvo/production/97876b3c8fe9d86cc5c50e8ace95d98820303a5e-2000x1268.png?w=1600&fit=max&auto=format) At last, this has caught the attention of leading politicians. This week, Rachael Reeves was on what was described as a “charm offensive” to urge companies to stay in the UK and list here. Apparently, she is investigating some measures to go along with the charm, for example, getting rid of stamp duty for newly listed shares in the UK and potential tax reliefs for entrepreneurs on proceeds from IPOs. All I can say is well done, Rachael, at last! Gilt auctions Hot on the heels of a recent 10x oversubscribed gilt auction, this week saw an auction of £5bn of four-year gilts (October 2029). This auction was oversubscribed by just under 3x. This was the 67th auction this year and provided no evidence once again of the widely discussed buyers’ strike that the doomsters in the financial media are so keen on. ## What to look out for next week. Next week, the quarterly reporting season kicks off in the US with many results announcements, starting with a number of banks early in the week. It’s a quiet week for company results in the UK. It’s a very busy and important week for macro data in the US and the UK. In the US, there are scheduled to be inflation, labour market and retail sales data and in the UK on Thursday, August GDP data. It is unclear if the government shutdown will mean that some US data may not be released. In the UK, once again, we will have to navigate through ONS GDP data, which I am very confident will be revised in the future. I will look for anomalies in the data and give you my read of what’s happening in the numbers in next week’s update.