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

In addition to the other answers, there’s an element of pragmatic humility to it; if you’re wrong, the downsides of the fuckups are more contained, and the gentler increases better allow folks to study the effects before making additional choices.