By Michael X Can someone please explain how increasing interest rates can reduce inflation, when a rise in interest rates is inflationary by itself! For example: Interest rates go up, the cost of fuel goes up, transport costs go up, the cost of producing goods go up, Retail prices go up, Inflation goes up! HELLO, am I missing something here? Surely some smart person can work out how we can reduce inflation without adding to the problem. The whole article is found here: Inflation & interest rates - please explain!