A Bank of England rate cut in December has become the most probable scenario, according to Nigel Green, CEO of deVere Group, one of the world’s largest independent financial advisory organisations.

The prediction follows official figures showing the UK’s unemployment rate increased to 5% in the three months to September, while employment fell for a second consecutive month.

Financial markets reacted swiftly: ten-year gilt yields dropped to around 4.4%, and the pound weakened against the dollar and euro, reflecting growing expectations of a policy adjustment by the Bank of England.

“The latest data leave little doubt that the labour market is cooling faster than expected. Inflation is subdued, wage growth is softening, and confidence is ebbing. A December rate cut now looks not just possible, but necessary,” comments Nigel Green.

He adds that the combination of easing inflation and slowing activity is exposing the risk of keeping rates too high for too long.

“The Bank has achieved its goal of bringing inflation under control. Consumer prices have stabilised below 4% since summer, and core inflation continues to moderate. At the same time, retail sales, business investment, and hiring momentum are all slowing. That is the clearest signal yet that restrictive policy is biting hard.”

The Bank of England narrowly voted to hold rates at 4% in November, with four members of the Monetary Policy Committee pushing for an immediate reduction.

Nigel Green says that division reflects how close the central bank already is to its first rate cut.

“The internal split shows how far sentiment has shifted inside the MPC,” he says. “It’s no longer a debate about whether to ease, it’s about timing.

“We believe that a December move would be a logical and well-judged step in line with the evidence.”

He argues that a modest reduction would reinforce confidence that policy is being guided by forward-looking analysis rather than backward-looking caution.

“The UK economy doesn’t need shock therapy; it needs sensible calibration. A 25-basis-point cut would show that the Bank understands the changing reality and is ready to support recovery without jeopardising stability.”

Nigel Green warns that delaying action could deepen the slowdown.

“Mortgage renewals are tightening household budgets, small businesses are postponing investment, and unemployment is creeping higher. These pressures will intensify through winter unless borrowing costs begin to ease. The longer the drag persists, the more entrenched the weakness becomes.”

He adds that the global backdrop also supports a pivot. “The Federal Reserve has paused and is clearly preparing to ease in early 2025.

“The European Central Bank has opened the door to rate cuts next year, and other major economies are following the same path. The UK cannot afford to fall out of step. Keeping rates artificially high while peers move lower would put unnecessary strain on sterling and suppress already fragile demand.”

Long-term borrowing costs in the UK remain the highest among G7 economies, with 30-year gilt yields still above 5%. “That level of yield carries real fiscal implications,” says the deVere CEO.

“A small, earlier adjustment would help ease government financing pressures and align monetary and fiscal strategy more effectively after the Budget.”

He emphasises that the Bank’s credibility depends on recognising when conditions change. “Inflation has been beaten back. The challenge now is to prevent stagnation. The Bank must shift its focus from restraint to renewal.”

Nigel Green concludes: “December represents a window of opportunity. The economy is losing momentum, but inflation is anchored. The conditions for a measured cut are in place.

“Acting now would show foresight and reinforce confidence heading into 2025. Waiting until the damage is visible would be a costly mistake.

“The Bank should and, we believe, will move next month to cut rates.”