I grew up in Oregon, and did a lot of riding in weather like that. With proper gear, you stay dry and warm about an hour, and then you start getting wet and cold anyway, because with enough rain, it seeps through pretty much anything. 5 degrees C and rain is way worse than snow and -5C for staying outdoors for long periods of time.
This is the thought I have about chilly/damp weather.
If the extent of your time outside is going from one building to another then (at least until the temperature actually drops far enough to become dangerous), less clothing is better.
If it's in the mid-30s and slightly drizzling outside, but it's only a 20 minute walk to work, then a t-shirt and jeans are the way to go. The instant you step into a building you'll be warm and dry as a bone while everyone else will be damp and chilled for some time. My jacket only goes on if I perceive a hypothermia risk, and gloves only get used if I think frostbite might become a risk.
Well, at least it can warm up that way. Indeed, neoprene is pretty effective for bike riding in that kind of weather, even though it gets kind of heavy and sloppy.
Which is why you dress for being warm and wet. I'm commuting by bike every day in London and it's usually been between -2 and 2 deg C in the morning/evening the last few months (with occasional milder spells).
I use arm roubaix backed lycra arm and leg warmers. They're not waterproof and they get wet quickly in rain but you soon warm up the water that gets trapped and then you're fine. It's the same principle as a wetsuit.
Getting the number of layers right is tricky. Too few and you'll be cold. Too many and you'll soon start to overheat. The ideal is starting off feeling cold but warming up within 10 minutes of the ride. Warming up much sooner than that usually means you've got too many layers on.
A waterproof jacket is good but don't expect it to keep everything out, so a tight base layer (e.g. Skins) on the torso can be good.
I've done several 24+ hour rides in constant rain with temperatures below 5 deg C using this strategy with no problems.
