Outside garden wall ties into house

[chriz1]

Hi, following on from a previous post, to make kitchen warmer I spotted this wall after we removed a shed that ties into the house. I can see the dpc is full of water hasn't rained since weekend. 

I have a feeling that the garden wall is soaking water into the house wall it is a cavity but still it can't be good and probably creating a cold bridge also. 

Is my thinking right ? Will I see a benefit from cutting out an inch or so so theres nothing connecting to  the house?  Pic attached 

Edited December 12 by chriz1
Pic