“But how high interest rates need to go and how quickly we get there will be guided by the incoming data and the evolving outlook for inflation and the labour market,” he told the Anika Foundation in Sydney on Thursday.

Lowe’s speech follows another 50 basis point lift in the cash rate on Tuesday to tame soaring inflation.

It was the fifth interest rate hike since May.

The central bank boss also used the opportunity to explain the board’s “very large forecast miss” to foresee the surge in inflation.

“Forecast misses of this scale should lead to soul-searching by forecasters and they certainly have at the RBA,” he said.

He noted that the central bank was not the only one with inaccurate predictions.

“Some forecasters were certainly expecting higher inflation than we were, but the magnitude of the pick-up in inflation has taken everybody by surprise,” he said.

Lowe laid out the reasons for the unexpected lift in inflation, starting with Russia’s invasion of Ukraine limiting the production of energy.

He also said there was a surge in demand for goods at a time when Covid was interrupting production and therefore supply.

“The result was that many industries quickly found themselves on the sharply upward sloping part of the supply curve, and prices increased.”

Lowe said the home building sector was a good example of this trend.

“Very strong demand in this sector – partly due to low interest rates and government grants totalling up to $35,000 for some first home buyers – came up against Covid-related problems on the supply side,” he said.

“The result was a big jump in prices, which has had a material impact on the overall inflation rate in Australia.”

The RBA governor also addressed calls for his resignation from the Greens and Nationals senator Matt Canavan, based on an earlier assertion that rates would not start rising until 2024.

“I can assure you I have no plans to resign,” he said.

Despite surging inflation, Lowe said the economy was also showing signs of strength, including record low unemployment.

“People have jobs. Kids have opportunities. Household incomes are rising. That’s what I would say to people who don’t like me in my job,” he said.

Lowe also said he never promised rates would not start rising until 2024.

“What we said was we thought the pandemic was going to have long-lasting disruptive effects on the economy that would keep inflation low and would keep unemployment high for years, and we wanted to do what we could to prevent that,” he said.

“And that meant we were likely to keep interest rates low for a long period of time out to 2024, so it was highly conditional.”