Neil Breen says the Reserve Bank governor should fall on his sword for the central bank underestimating the pace of inflation.

In a speech in Sydney today, RBA governor Philip Lowe admitted the central bank, and other economists, failed to forecast surging inflation and the need for consequent rise in the official cash rate.

But Mr Lowe said the “magnitude of the pick up in inflation has come as a surprise to everyone” and the situation was the same globally.

“Forecast misses of this scale should lead to soul-searching by forecasters, and I can tell you it’s led to soul-searching at the RBA.”

But Neil said his mea culpa didn’t go far enough, and it only mattered when the RBA gets it so wrong.

He also criticised the governor after he suggested in late 2021 interest rates wouldn’t rise until 2024.

“He’s got to do better, Philip Lowe. He should fall on his sword and walk out the door.”

Press PLAY below to hear Neil’s views in full

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