Bring a large pot of salted water to a boil. Add macaroni and boil, uncovered, until just tender to taste. Drain, rinse with cold water and set aside.
Preheat oven to 350 F (180 C).
In a large pot, melt butter over medium heat and add flour. Stir with a wooden or non-reactive spoon until mixture has a lightly nutty aroma but no colour, about 5 minutes.
Slowly whisk in milk, then bring entire mixture up to a simmer, whisking constantly. If lumps do occur, strain and return to heat. Add nutmeg and whisk in cream cheese until smooth. Reduce heat to medium-low and stir in cheddar until melted.
Stir in cooked macaroni and spoon into an 8-cup (2 L) baking dish. Sprinkle with breadcrumbs and bake for 25 to 30 minutes, until bubbling around the edges.
Cool for 10 minutes before serving.
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