Britain faces a prolonged recession unless interest rates are cut immediately, one of the country's monetary policymakers has warned.

The country could see at least a year of negative growth unless monetary policy is relaxed, according to David Blanchflower, who helps set interest rates on the Bank of England's Monetary Policy Committee (MPC).

"It's not too late to stop it but we have to act now," he told the Guardian newspaper.

His comments came as a leading think tank warned that Britain was facing an economic "horror movie" and would struggle to avoid recession next year.

Ernst & Young's Item Club is forecasting GDP growth of 1% next year, inflation to remain above the Government's target for the next 12 months, and a "substantial" increase in unemployment to the two million mark.

Mr Blanchflower, who has consistently voted for interest rate cuts at this year's monthly MPC meetings, said: "I think we are going into recession and we are going into one right now. We will probably have three or four quarters of negative growth but the risks are to the downside."

He added: "Monetary policy has been far too tight for far too long. We can't just sit and do nothing as we have done for too long."

The economics professor is urging his fellow MPC members, who earlier this month voted to keep interest rates on hold at 5%, to look through "the short term blip upward in inflation" and focus on the medium-term picture.

The cost of living index is currently running at 3.8%, nearly double the Government's 2% target, and is being driven by soaring oil and food prices. Bank of England Governor Mervyn King has repeatedly said his focus is on bringing inflation back down to target. The MPC last cut rates in April.

Mr Blanchflower said: "Our job is to focus on inflation in the medium term so we have to look through the short-term shock from oil and commodity prices."

Item predicts that consumer spending will nearly slow to a standstill in 2009, rising by just 0.2% as households continue to wrestle with rising inflation, lower credit availability and a sharp reversal in the housing market.

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