Bank's Blanchflower says big rate cuts needed

Blanchflower disagreed with that -- he thinks wage growth will weaken as unemployment rises because workers shy away from demanding higher more pay as they worry about losing their jobs.

The latest official figures show the number of people out of work increased by 60,000 in the three months to June on the internationally comparable International Labour Organisation measure to reach 1.67 million.

"To sit and worry about inflation expectations and what is going to happen to those, rather than worry about the fact that the economy is going to go into a recession seems to be misguided," he said.

"What we have now is a turning point in many ways -- certainly you might think of it as a paradigm shift. We have a global financial crisis, an oil shock coming, people with little experience of what is really going on."

Blanchflower said much of the debate about inflation was "very short-sighted".

"The question is what's going to happen in prices in 18 months down the road and the answer is inflation is going to plummet like a rock," Blanchflower said.

The arch-dove said he felt as if he was carrying the weight of the British people on his shoulders.

"I feel that things I have been fearful about have come to pass and I have actually been pretty accurate in what's coming and I have failed to convince the others (MPC members) of what is appropriate."

(Editing by Gerrard Raven; Reuters messaging: sumeet.desai.reuters.com@reuters.net; +4420 7542 7708))