Bank's Blanchflower says rates "restrictive"

LONDON (Reuters) - The Bank of England needs to stop worrying about inflation and cut interest rates to prevent a sharp slowdown in growth, central bank policymaker David Blanchflower said in an interview published on Monday.

In an interview with the Guardian, Blanchflower said it was essential the Bank's Monetary Policy Committee (MPC) "get ahead of the curve" as the current level of UK interest rates at 5.5 percent was "restrictive."

"Worrying about inflation at this time seems like fiddling when Rome burns," said Blanchflower, the only MPC member to vote for a rate cut earlier this month.

The other eight policymakers favoured leaving borrowing costs at 5.5 percent because of upside risks to inflation.

MPC member Andrew Sentance told Reuters last week that market expectations of several more rate cuts were ignoring rising price pressures.

Central bank Governor Mervyn King also said last week that policymakers had to balance slowing growth against rising inflation.

Blanchflower told the British newspaper that the greater danger was to ignore the risk of a slowdown.

"I believe that there are risks to the upside to inflation but the greater risks are to activity on the downside," he was quoted as saying.

"Evidence from the housing market and especially the commercial property market is worrying," he said.