Many of the nation's major banks, led by Chase Manhattan of New York, boosted their prime lending rates today from 11 1/4 to 11 1/2 percent, the second quarter-point increase in that key lending rate in two weeks.

But Chase and banking analysts cautioned that the increase should not be taken to mean that interest rates are poised for another steady rise.

A spokesman for Chase, the country's third biggest, said that the prime-rate increase reflects higher costs of funds the bank borrows on the open market. "Loan demand remains moderate," the spokesman said. The prime rate is the interest banks charge their best corporate customers for short-term loans. As recently as mid-April the prime rate was 20 percent.

Most of the increase in short-term interest rates in the last seven weeks has come about as the Federal Reserve withdrew funds from the nation's banking system in order to slow the growth of the money supply, thus causing a tightness that is perhaps temporary in the reserves that banks lend each other overnight, so-called federal funds.

The Federal Reserve, the nation's central bank, influences the federal funds interest rate directly by decisions to supply funds to or withdraw funds from the nation's banking system.

Other short-term interest rates are closely related to the federal funds rate.

Patrick Savin, an economist with Drexel Burnham Lambert Inc., said the central bank has been taking steps to slow the growth of bank reserves and the money supply since early July, but said that when the Fed reduces monetary growth to the targets it has set, interest rates should fall again.

Because of the recession, business demand for credit has slackened considerably although loan demand can rise from time to time as companies have to finance inventories they cannot sell or if they need temporary influxes of cash because of declining profits.

The Federal Reserve, which gave the money markets fits last week because of some strange actions on behalf of a foreign client (probably the West German central bank), has not been either a buyer or seller of securities this week, according to William Sullivan, vice president of the Bank of New York.

He said the money markets were "extremely quiet" today, in part because the New York financial scene is always dull in the week before Labor Day and because traders and investors are awaiting Friday's weekly Federal Reserve statement about the growth of the money supply in the week ended Aug. 20.

Last week the Federal Reserve said the money supply declined $3.6 billion.

Although on the face of it that is a large decline, it follows a week when the money supply exploded, growing more than $9.5 billion after revisions.

Analysts said part of that record one-week growth was due to technical factors -- including an early payment of Social Security checks -- but the next week's decline was not big enough to allay fears that the money supply was growing so fast that the central bank might have to take more vigorous steps to slow its growth.

Those steps would lead to higher interest rates as the central bank sold securities and soaked up funds that banks might otherwise lend.

The money supply essentially is cash and checking accounts in the economy, although there are broader definitions of money that include savings deposits. If the money supply grows too quickly, economists say, inflation accelerates.

The $9.5 billion growth, even mitigated by the subsequent fall in the money supply, is far in excess of the pace the federal Reserve could tolerate and still hope to wield monetary policy as an inflation-fighting tool.

But analysts note that one-week money supply figures are imprecise and that last week's report could be revised to show an even bigger decline and this week's figures could show further fallofs in money growth. Furthermore, any Federal Reserve action to tighten money policy always has a delayed effect.

In recent days the central bank has pursued an almost hands-off approach to its open-market buying and selling of government securities.