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
They could do a large jump and then you’d be here complaining about the impact and ELI5 “why did they do this??”.
Firstly, interest rates aren’t the only thing impacting inflatiron. Why the focus on rates? Supply.chain challenges, to consumer behavior, to fiscal budgets to trade agreements all have an impact here. Expecting rates to be a one and done solution is nonsense.
Secondly, rates impact the economy first and foremost. Inflation is impacted as a by-product. To build off of this, you’d be giving households little time to adjust to higher rates on their mortgages. How are normal people supposed to just eat an extra $500 per month cost over night?
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