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There’s an election coming up.

The reason is nobody knows the correct rate to stop inflation and nobody wants to drive rates too much, as that also would have bad consequences.

We know the correct interest rate. It is 2% above inflation. https://en.m.wikipedia.org/wiki/Taylor_rule

Better to do nothing than to make a mistake your political competition will point out...

I don’t think it’s that simple. Very high monthly mortgage payments will massively reduce demand for new housing. Will bring all new construction to a complete stop. And then layoffs in the construction industry. But the worse thing is it won’t bring the rents down because no new houses are being built.

It'll bring rents down because people who lose their jobs won't be able to afford those rents and will get evicted.

The reason is government needs to print out of debt. That's why transitional inflation is permanent.