I liked this blog posting from Big Pink Cookie about the London yarn shopping experience which inspired me before I left on my trip to try to find these shops in London (it turned out I didn't have time).
Last spring, Dalis Davidson of Dancing Leaf Farm spent several months in Cambridge England. When I came back from my trip, I had a conversation with her about British wool (during the Countryside Artisans Tour). She described much of the British wool as not high quality, when compared to American wools. I think many people would find this surprising (I'm not an expert in sheep raising, fleeces, etc.). There is a British Wool Marketing Board which oversees the quality of the product. I noticed when seeking information, including reading British knitting magazines, that most of the wool producers are in the north of England, though there are a fair number of alpaca farms throughout the country (while I like alpaca, and even buy locally produced alpaca yarns, I tend prefer sheep wool, or alpaca from South America).
I am fascinated with the idea of rare breeds and yarns made from their fleece. I have noticed these yarns tend to seem scratchy, but perhaps soften up. Flying fibers, who have a booth at Maryland Sheep and Wool Festival, sell organic rare breed wool from England.
Before I went to England, I got Beth Brown Reinsel's book
I found an online source for 5-ply guernsey yarn Frangipani.
Unfortunately her very reasonable prices just went up as of Jan. 2008 because of increased costs.