# Roundup of the week: 24 October 2025 _Markets have settled, inflation is easing, and the data continues to confound the pessimists. This week saw better-than-expected figures from the UK, an imminent Fed rate cut in the US, and solid results from the major UK banks. Meanwhile, the media’s obsession with fiscal “black holes” rolls on — but the evidence still doesn’t support it._ Neil Woodford · 24 October 2025 · 5 min read ![At this week's Regional Investment Summit in Birmingham, Rachel Reeves said Brexit made the UK’s economy and productivity “weaker” than initially forecast when the UK voted to leave the European Union.](https://cdn.sanity.io/images/v3acfbvo/production/996293c2fe11de6317af4e86573dd5777151a976-1446x1025.jpg?w=1600&fit=max&auto=format) --- **If you think we 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)**.** First, I should apologise for a late roundup of the week. I have been travelling this week and have not always had the best internet connectivity. Once again, quite a lot has happened, but I have covered the most important here. ## Politics ### US President Trump is clearly a polarising figure, but one thing that you cannot criticise him for is his lack of energy. This week, the 79-year-old president has been engaged on domestic policy issues as usual, including the war in Ukraine and his latest attempts to encourage Russia to the negotiating table. He also has an upcoming face-to-face meeting with President Xi in Korea next week, where the hope and expectation is that a grand bargain may be struck on China/US trade. Perhaps of greatest significance this week was Trump’s decision to sanction Russia’s two largest oil companies, Rosneft and Lukoil, “as a result of Russia’s lack of serious commitment to a peace process to end the war in Ukraine”. These measures, on top of those being applied to the biggest buyers of Russian oil and the companies that Russia uses to transport it, are significant. The US is also threatening secondary sanctions on foreign financial institutions that do business with these two companies. The aim is explicitly to degrade Russia’s ability to continue to wage war in Ukraine and to undermine its oil economy. The oil price rose 5% on the announcement. Following these measures, it appears that China and India are planning to sharply reduce their imports of Russian oil immediately. It will take time to see if these measures will have the desired effect, but it is clear that just a few days after President Putin closed the door on the latest peace initiative, Trump is serious about putting maximum pressure on Russia to end the war. This announcement will have no doubt surprised Putin and those who have been criticising the US president for his stance on the war. The confirmation that Trump and Xi will meet in Korea at the end of next week is undoubtedly good news. It is highly unlikely that the two parties would have agreed to this high-profile face-to-face meeting if the chances of a trade deal were remote. ### UK The volume of speculative nonsense ahead of November’s budget increased this week, with all sorts of media stories about what the Chancellor will announce in a few weeks. The Chancellor herself probably doesn’t yet know what she will be saying, so quite how some financial journalists are so sure is beyond me. My view remains that the so-called fiscal black hole is an illusion that exists only in the spreadsheets of the bearish forecasts of institutions like the NIESR, the IMF and IFS, for example. I am confident that the Chancellor will take some comfort from the fact that the media is managing expectations for her. I am sure there will be tax-raising measures in the budget, but I remain confident that their scale will be nowhere near the gloomy consensus now doing the rounds. ## Economics ### UK My relatively bullish perspective on the UK economy's outlook has sometimes felt lonely in recent months. So I was especially pleased to see an almost upbeat comment in the FT’s Lex column this week: > More signs this week that the UK economy isn't doing so badly. Retail sales and consumer confidence beat expectations, and big banks made encouraging noises about their customers' finances. In short, households don't seem worried. Should they be? This comment followed better-than-expected retail sales data and indicators of rising consumer confidence, as well as lower-than-expected inflation and better government borrowing figures. All in all, it was a good week for UK macroeconomic data. Not surprisingly, this good news didn’t attract anything like the attention it deserved from the financial media, but that isn’t surprising given that it contradicts the overwhelmingly negative consensus narrative. In terms of what this means for policy, we will have to wait and see with respect to fiscal announcements until the 26th of November, but in relation to monetary policy, the inflation data in particular will be important. The MPC meet in early November, but the meeting’s proximity to the budget is in some quarters interpreted as meaning that interest rates will be on hold. This may be correct, but the MPC’s voting behaviour and the narrative accompanying the decision should at least indicate an increasing likelihood of a cut in December with more to come in 2026. ### US Briefly, while the US Government shutdown continues, the flow of economic data has been much reduced. However, we did see US inflation numbers at the end of the week that were, like the UK's, better than expected. This means that a Fed cut next week is a near certainty given that weak labour market data has already left its mark on the rate-setting committee. ## Markets This week's most significant move in financial markets was the shift down in government bond yields in the UK. In the US, ten-year yields are just below 4% and in the UK, ten-year yields have fallen from 4.75% a few weeks ago to 4.4% at the end of this week. This is significant not just because this market move contradicts the near panic consensus rhetoric of recent weeks, but may also indicate increasing market confidence that UK inflation has peaked (below the OBR’s forecast 4%) and is now headed back down to the 2% target next year. As better inflation data emerges, I suspect that ten-year yields will fall well below 4% over the next six months. As for company results, the US results season has generally been better than expected with a significant margin over consensus expectations. The Mag7 have reported good numbers too. In the UK, the results from the three large UK-focused banks, Barclays, Lloyds, and NatWest, were of particular note this week. All three produced better than expected results with good outcomes on net and non-interest income, good cost control, lower than expected provisions despite one or two one-offs, good ROEs and excellent capital generation. All three are companies I follow. ## What to look out for next week It’s going to be a busy week again. The results season will continue on both sides of the Atlantic, and some more of the companies I follow will report. In addition, I expect the Fed to cut rates on Wednesday and the world to be very focused on the Xi/Trump “summit” in Korea on Friday. It’s going to be interesting.