The Libertarian Alliance has just received a news release from Nigel Green of the deVere Group, sent via the Prior Consultancy, criticising the today’s cut by the Bank of England of its base rate as not enough to sustain economic growth. This release demands more than just a rebuttal. It requires a full unmasking. The underlying assumption of their argument, though never stated directly, is the Keynesian belief that a central bank can create wealth and stability by manipulating interest rates and pumping money into the economy. It is the classic fallacy of the seen and the unseen: we are shown the supposed benefits of a rate cut—cheaper mortgages, a temporary stock market rally—but not the long-term damage this causes to real savings, capital formation, and social order.

Let’s begin by restating the facts. The Bank of England today cut its base rate from 4.5% to 4.25%. Green calls this insufficient, claiming that “a half-point cut would have shown the Bank is ready to act decisively.” He accuses the Bank of “hesitation” and urges a quicker descent to at least 3.5%. According to Green, the threats of a slowing global economy, “Trump’s erratic trade policies,” and “soft consumer demand” call for emergency measures. This, we are told, is what leadership looks like. Yet there is no evidence that flooding the markets with cheaper credit has ever created sustainable prosperity. Indeed, the historical record suggests the opposite.

From the perspective of Austrian economics, interest rates are not just a dial to be adjusted by a technocratic elite. They are the price of time. More specifically, they are the price of deferred consumption. When central banks cut interest rates artificially, they distort this price. They send a false signal to investors and entrepreneurs that savings are more abundant than they really are. The result is what Ludwig von Mises called malinvestment—a misallocation of capital into projects that cannot be sustained once rates return to a market-clearing level.

What Nigel Green and his supporters advocate is not sound economic policy. It is monetary fraud, made respectable by academic credentials and the jargon of macroeconomics. In truth, the whole Keynesian enterprise is a form of central planning. It assumes that bureaucrats can know, in real time, what the appropriate level of consumption, investment, and liquidity should be across an entire economy. They cannot.

The wealth of a nation does not arise from easier credit, but from increased productivity—more and better goods and services produced for lower real costs. That means encouraging savings, lowering taxes, and reducing regulatory burdens. It means honest money. Anything else is just a transfer of resources from the prudent to the profligate, from the real economy to the financial sector.

It is revealing that Mr Green does not once mention inflation. This is the inevitable result of rate cuts when they are unmoored from genuine savings. Indeed, inflation is not some mysterious force that descends from the heavens; it is a policy. It is a deliberate dilution of the currency to benefit debtors, governments, and financial institutions at the expense of everyone else. When the Bank of England reduces rates while keeping the printing presses warm, the pound falls. Prices rise—not evenly, but chaotically—and savers are robbed in slow motion.

This is not just theory. Britain’s own experience proves the point. After the Bank slashed interest rates in response to the 2008 crisis and launched a vast programme of quantitative easing, asset prices soared while real wages stagnated. House prices became unaffordable. Young people were shut out of ownership. The elderly saw the value of their pensions eroded. And the financial sector—flush with newly created money—was rewarded for its earlier recklessness.

This is the “leadership” that Nigel Green wants to see more of.

Green calls the Bank’s decision “caution,” and he means it as an insult. But caution is exactly what is needed. Britain today faces immense challenges: falling productivity, high public spending, a fragile consumer base, and the overhang of decades of credit expansion. Slashing interest rates will not fix these problems. It will only conceal them, buying a few more months of apparent calm while making the ultimate reckoning worse.

A true conservative approach to monetary policy would be this: fix the value of the pound to a defined quantity of gold, and enforce convertibility. Remove the power of the Bank of England to tinker with interest rates. End the cycle of booms and busts by allowing interest rates to be determined by supply and demand—by real savers and real borrowers.

Yes, such a move would be painful in the short term. Financial speculation would dry up. Government borrowing would become more expensive. Asset prices would fall to their natural levels. But in the long term, it would restore discipline. It would end the cycle of inflationary bubbles followed by deflationary panics. It would reward thrift, foresight, and honest enterprise. And it would prevent Britain from following the United States into a permanent monetary twilight in which nothing has value except as collateral for the next round of debt.

Green’s most revealing claim is that “sometimes the safer move is the bolder one.” This is a rhetorical trick. It presents recklessness as prudence, just as Keynesians present debt as stimulus and inflation as growth. But the real boldness today lies in restraint. It lies in refusing to be panicked by lobbyists and speculators. It lies in telling the financial sector that its short-term problems are not the nation’s problems.

What would a truly bold Bank of England do? It would freeze the base rate. Then, to restate, it would declare a gradual return to a gold standard. It would end its “forward guidance” nonsense and cease trying to “stimulate” the economy like some mad scientist zapping a corpse with electricity. It would recognise that the job of a central bank is not to create wealth, but to preserve the value of money.

Monetary policy, as now practiced, is a tool of expropriation. Interest rate manipulation is not science; it is theatre. Every cut, every promise of “stimulus,” is a tax on savers, a subsidy to borrowers, and a transfer from the real economy to the shadow world of financial engineering.

Britain’s only path back to economic health is through honesty—honest labour, honest production, and honest money. Until we abandon Keynesian fantasy and return to a currency backed by something real, the long decline will continue.

And that decline will not be halted by another quarter-point cut.

Bibliography

• Hayek, Friedrich A. Prices and Production. London: Routledge and Kegan Paul, 1931.
• Menger, Carl. Principles of Economics. Translated by James Dingwall and Bert F. Hoselitz. Auburn: Ludwig von Mises Institute, 2007.
• Mises, Ludwig von. Human Action: A Treatise on Economics. Auburn: Ludwig von Mises Institute, 1998.
• Mises, Ludwig von. The Theory of Money and Credit. Translated by H. E. Batson. Indianapolis: Liberty Fund, 1981.
• Rothbard, Murray N. America’s Great Depression. Auburn: Ludwig von Mises Institute, 2000.
• Rothbard, Murray N. What Has Government Done to Our Money? Auburn: Ludwig von Mises Institute, 1990.
• Salerno, Joseph T. Money: Sound and Unsound. Auburn: Ludwig von Mises Institute, 2010.
• White, Lawrence H. The Theory of Monetary Institutions. Oxford: Blackwell, 1999.

The News Release (8th May 2025)

The Bank of England should have “gone bigger” with rate cuts to match the scale of the threat the UK now faces, warns the CEO of one of the world’s largest independent financial advisory and asset management organizations.

The warning from Nigel Green of deVere Group comes as The Bank of England cut UK interest rates by a quarter-point to 4.25 per cent and signalled further reductions to come as the uncertainty of US President Donald Trump’s global trade war impacts growth.

“With growth slowing, business confidence cracking, and the global economy facing renewed threats from President Donald Trump’s erratic trade policies, the Bank’s caution risks becoming part of the problem,” says the deVere chief executive.

“This decision smacks of hesitation at a time when speed and scale are what matter most.

“Central banks aren’t there to observe; they’re there to lead. A half-point cut would have shown the Bank is ready to act decisively in defence of the UK economy. Instead, it blinked.”

The warning signs aren’t subtle. Global trade is in flux. The UK’s biggest trading partners are bracing for more tariff disruption, business investment is slowing, consumer demand is soft, and mortgage activity is weakening.

“And yet, the Bank is still taking baby steps.”

Financial markets are already pricing in three more cuts this year. That would bring the base rate to 3.5%—a full 175 basis points down from the peak.

“If the destination is clear, why take the longest road to get there?” asks Nigel Green.

Policymakers often talk about balance. But in the real world, businesses don’t operate in academic models and households don’t feel economic theory.

They need confidence, clarity, and lower borrowing costs—fast. A bigger rate cut would have been responsible, he argues.

“We’re seeing exactly the kind of uncertainty that rate-setters should be prepared for: geopolitical chaos, a fragile consumer, and the lingering effects of a cost-of-living crisis,” Nigel Green adds. “Sometimes, the safer move is the bolder one.”

He continues: “The longer the Bank dithers, the more ground it loses. Slow and steady easing may suit textbook theory, but it won’t lift confidence, unlock lending, or shield the UK from the fallout of a destabilized global trade regime.”

This isn’t about surprising the market, according to deVere. It’s about showing leadership. A 50-basis point cut would have been read globally as a sign that the UK understands the moment.

Nigel Green concludes: “The Bank chose caution. And the price of caution, in this environment, is rising.”