In his mid-year update, Neil reflects on how his January forecasts are holding up, shares his latest thoughts on inflation, global equity markets, interest rates, and the opportunities he’s seeing in the UK and Asia.

He discusses the impact of Trump’s tariff announcements, reassesses the outlook for China and Europe, and explains why UK equities — particularly in overlooked domestic sectors — remain one of the most compelling opportunities for long-term investors.

Neil also touches on how long-term investors should navigate a world of noise and policy shifts — and why he remains confident in his core investment themes.

W4.0, Neil’s new strategy platform, launches this week. Join the Founders List to get your special Founders pricing.

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P.S. from Neil: Oops, the ONS did it again!

Two weeks ago, in a post entitled, Oops, I got that wrong, I highlighted my embarrassment at getting my inflation numbers wrong. In summary, the April inflation number published by the ONS was quite a bit higher than I had expected at 3.5%. I had expected something closer to 3%. Despite this outcome, because most of the increase was the product of what my favourite economist describes as “administered inflation”, or in other words the product of fiscal policy decisions rather than inflation produced by the wider economy, the higher number hasn’t changed my view about what is going on in the underlying economy nor about what I expect the MPC to do with base rates.

At the end of the note, I also highlighted an anomaly in the ONS data that had added 0.2% to the headline number. Without boring you all with the details again, this one item was driven by the ONS’s assessment of the impact of higher vehicle excise duty on new cars priced above £40,000. At the time, this number looked odd, and I wrote at the time that I suspected it was wrong. Well, today, we have found out that it was.

The ONS has stated in a press release that “an error has been identified in the Vehicle Excise Duty data” provided to it by the Department for Transport. According to the ONS, this error has resulted in an overstatement of CPI by 0.1%. (My favourite economist, who highlighted this potential error to me in the first place, thinks the overstatement is larger than 0.1%.)

So, the ONS is blaming the Department for Transport for this important mistake, but my guess is that the ONS, with all the resources and expertise at its disposal, should have picked up this problem at the time.

So, although the April number is still higher than I had expected, it looks like it should be somewhere closer to 3.3% rather than the 3.5% the ONS published at the time. Now, this may seem a little pedantic on my part, but I think this is very important. Once again, it appears that the UK’s monetary and fiscal authorities are not getting accurate data on which to base their important decisions. This compounds the problems I have highlighted before about the fundamental problems the ONS confronts in measuring the economy by reference to monthly output data. To me, this looks like a fool’s errand, and it should be stopped.

On top of these problems, and something that has received no media attention, is the recent decision by the ONS to stop publishing producer price data. This means that the MPC now doesn’t have important information on what’s happening to input costs and output prices in the economy. As I have said repeatedly in this blog, there are fundamental problems in how the ONS measures the economy, and critically, I suspect that the official data is understating growth and productivity. It now appears that inflation has been overstated, too, and the lack of producer price data removes a key forward indicator of future price pressures, or the lack of them, coming from industry.

To compound this mess, we also confront a situation where the data shows that the UK economy grew by a very healthy 0.7% in Q1, but the MPC says that “underlying” growth was zero, but the MPC won’t tell anyone what “underlying” growth is and how they measure it. More confusion. On top of that, the government is being told by consensus economics, the OECD and the IMF that there is a fiscal problem in the UK and that taxes need to rise to head this off. My guess, once again, is that this alarmist, lazy analysis is wrong and based on data that paints an inaccurate picture of the real underlying fiscal situation. We shall see.

In summary, I should say that the tasks confronting the ONS, MPC and OBR are not easy. But, for years, the answer to the challenges they have confronted seems to be based on the theory that more complexity leads to better analysis and conclusions. The real-world experience is the exact opposite. The more arcane and complex their processes and models have become, the less accurate and useful their output has been. My advice is to please keep it simple and focus on the things you can and should be able to measure accurately. That might lead to better policy decisions from which we would all benefit.