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

The Fed raising interest rates is them pumping the brakes. You wouldn’t want them stomping on the brake’s every time a little inflation pops up. Doing it slowly lets them react to conditions as they develop.