Eli5, why are interest rates raised slowly every month rather than in one bigger chunk when inflation is so high?

Question

Every month the BofE raises the interest rate bit by bit, knowing inflation is so high and knowing they had to raise the rates quite high, why do it so slowly?

In: 35

Answer 1

Think of the economy as a glass cup, and inflation is heating it up. You want to cool things down before you get molten glass, and your primary way of doing so is adding water (raising interest rates). You can add water slowly over time to slow the increase in temperature, or you can dump all the water at once, shattering the glass, because you shocked the system too much.