# Roundup of the week: 12 September 2025 _This week brought disturbing news from the US with the assassination of Charlie Kirk, fresh debate in the UK over tax rumours and economic forecasts, and more evidence that my non-consensual view on UK growth is holding up. In the US, a weaker labour market makes a Fed rate cut next week inevitable, while China continues to roll out stimulus measures._ Neil Woodford · 12 September 2025 · 6 min read ![Merck has scrapped a planned £1bn UK expansion, will shift life sciences research to the US, and is cutting 125 UK roles, including an exit from London lab space near King's Cross.](https://cdn.sanity.io/images/v3acfbvo/production/a1bfe147f933e07418df9baff1c348b4e869e454-2000x1331.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, [please let me know](mailto:hello@noisecancelling.co), and I will give you my view. ## Politics ### US The tragic news from the US about the assassination of Charlie Kirk is deeply disturbing in and of itself, but I fear that it may have wider, potentially serious implications for US politics and society in the future. ### UK Although the media paid virtually no attention to this story, which might have been why I missed it, I thought it was interesting and important, albeit a few days old. Surprisingly, a group of Labour MPs went on record to say that pre-budget kite flying was damaging growth by undermining confidence in the economy. I agree with them and wrote about this a couple of weeks ago. But again, surprisingly, Rachael Reeves has gone on record saying that the source of these stories about tax-raising measures that might be being considered by her team is not that team, nor is it the Treasury. She also commented in a BBC interview that forecasts of a £50bn black hole in the public finances were “rubbish”. She added that last month’s NIESR forecast, which kicked off this debate, came from an organisation that had “more than most got their numbers wrong in the last few years”. It is not often that I agree with this Chancellor, but we are in complete agreement on these subjects. In fact, I would not have been quite so polite about the NIESR. I would have said that their forecasting record was lamentable and might have added that based on that record, I doubt whether they could forecast Christmas. ## Economics ### UK Although it is wrong to alight on individual data series to conclude, unequivocally, that something as complex as an economy is doing what you had anticipated, an accumulation of evidence is something forecasters should pay attention to. With respect to the UK economy, there are always conflicting signals, and whilst resisting the temptation to indulge in confirmation bias, I am becoming more confident that my non-consensual views are right. In recent days, retail sales, BRC survey data, mortgage lending and wage settlement data have all supported my underlying views about the outlook for growth, inflation and interest rates over the next eighteen months. A test of this hypothesis will be conducted later today, with UK GDP data for July. Following better-than-expected data in recent months, the expectation is that these numbers will not be good, namely showing no growth in July and a three-month number showing 0.2% growth. My hunch is that, given the recent better-than-expected momentum in the economy, the consensus is likely to be too downbeat. We will see, and I will comment on these data in a bit more detail in next week’s round-up. ### US There has been a lot of labour market information in recent weeks, and interestingly, some significant downward revisions to historic data too. Without going into too much detail, it all points unequivocally to a US labour market that is much weaker than consensus had anticipated. This makes a cut in US interest rates next week a certainty. What is now under debate is whether the cut will be 25 or 50 basis points. The consensus view is that the FOMC will recommend 25bps, but the fact that 50 is now considered a possibility indicates how much recent data has changed perspectives. Of course, what will also weigh on the decision is the debate about the extent to which US inflation will be affected by Trump’s tariffs. So far, the evidence is that the effects are much less significant than anticipated, but some argue that these are yet to emerge. My hunch is that the FED will cut by 25bps, but the commentary will be dovish, caveated by the usual comments about vigilance regarding inflation data. This will, I think, increase the likelihood of further cuts in US interest rates later this year. ### China China’s economic stimulus package continues to unfold, almost a year on from the first announcement last September. In the latest announcement, the government has stated that it is preparing to tackle the significant backlog of unpaid bills owed by local governments to the private sector, which some have calculated is over $1 trillion. The government is apparently looking to state banks to lend to local authorities to start to make the payments in arrears, with the ambition that this will be resolved by 2027. This follows President Xi’s speech in February this year, in which he warned that the government’s delayed payments to private sector companies risk undermining public trust in the authorities. This news should help to bolster confidence in the Chinese economy at a time when the administration has seen concerns about growth, deflation, excessive price competition, and trade as clear and present potential dangers. ## Markets ### Bonds Government bond markets globally have settled down this week following the publication of weaker-than-expected US labour market data. The hysteria that was evident last week, and especially in relation to long maturity issues, has dissipated. Consequently, for example, thirty-year yields in the UK have returned to where they were back in January, and the US ten-year yield is close to dropping through 4%. This week’s market moves seem more rational than last week’s weirdness. I hope this period of sanity will continue into next week, which will witness a Fed interest rate cut, the first since the 25bps reduction last December. ### China After a period of consolidation earlier in the year, Chinese equity markets have once again started to perform very well. The mainland Chinese CSI 300 index (the top stocks on the Shanghai and Shenzhen stock exchanges) is now up 15.6% YTD. The Hang Seng is up just over 30% over the same period, reflecting recent better performance from several leading tech stocks, including Tencent, Alibaba and Baidu, amongst many others. Hilariously, mainstream commentators, many of whom were arguing that the Chinese equity market was uninvestible less than a year ago, are now significantly more bullish. A few weeks ago, Bloomberg, for example, wrote an article stating that China’s stock market rally “has the makings of a durable bull run.” How times have changed!! For the record, I said at the start of the year that I thought Chinese equities were undervalued and looked primed for recovery as stimulus measures take effect. ### UK company results Three companies I follow, Wickes, Eurocell and Vistry, reported results this week. I won’t bore you with the details on each company, but will highlight the trends that I think these results shed light upon. First to Wickes, a UK retailer of home improvement products. This business announced its Q2 results, which showed that the improving business performance reported earlier in the year was continuing through its second quarter, reflecting record market share growth and an improving underlying home improvement market. In contrast, both Eurocell and Vistry, which are exposed to the UK housing construction markets, highlighted more difficult trading conditions but also held out the prospect of an improvement in the second half of the year as interest rates continue to fall. ## What to look out for next week It’s a very busy macro data week. In the UK, we get labour market data on Monday, inflation data on Wednesday, the Bank of England’s rate decision on Thursday, and retail sales on Friday. I don't expect rates to change on Thursday, which is the consensus view, but I do expect a cut in November. In the US, Tuesday brings a whole host of data, including retail sales and manufacturing and industrial production data. Late Wednesday, the most important announcement of the week comes with the Fed’s FOMC decision on rates. There is also more labour market data on Thursday, which I suspect the FOMC will see before their rate decision. The corporate calendar is not particularly busy, but there are a couple of significant companies I follow reporting. Barratt Redrow reports full-year results on Wednesday, and Next reports interims on Thursday.