Fender co-produced the song in Los Angeles with Adam Granduciel of the American rock band the War on Drugs.

During a warm-up gig in Plymouth on 3 August, the singer premiered the new tracks "People Watching" and "Nostalgia’s Lie" live for the first time and announced that both would be included on his upcoming album.

Fender wrote the song and also participated in the production along with Adam Granduciel, member of the American band The War on Drugs.

[10][11] "People Watching" sees Fender reflect on the passers-by he observes on the street, feeling "envious at the glimmer of hope" in their lives.

[5] The song was described in a press release as "written for his late friend and mentor, Annie Orwin", and is based on Fender's "thoughts as he traveled to and from her palliative care home".

[11] Fender told BBC Radio 1 the song was inspired by walks to and from the care home where Annie died.

In the second verse, Fender criticizes the failings of the healthcare system, referring to it as understaffed and controlled by insensitive hands.

He stated that working on it was a cathartic experience and expressed gratitude to Sam, the creative team behind the film, and his mother, whom he dedicated the performance to.