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

Everyone is giving defenses of why they don’t do this, but you’ve asked a legitimate question. Noah Smith has a good rundown of the pros and cons here: [www.noahpinion.blog/p/why-doesnt-the-fed-just-hike-200bp?r=5zere&utm_campaign=post&utm_medium=web](https://www.noahpinion.blog/p/why-doesnt-the-fed-just-hike-200bp?r=5zere&utm_campaign=post&utm_medium=web)