LONDON (AFX) - Bank of England Governor Eddie George warned that interest rates may have to be raised to moderate consumer demand. "Consumer demand will have to moderate, I think there's a good possibility that it will begin to moderate of its own accord," he said in an interview with BBC television's World Business Report to be broadcast today. "When I say moderate I don't mean it falls off a cliff, but it slows down and that would be the most desirable outcome. "But we may have to actually act to cause it to moderate if it doesn't happen of its own accord and that's when we would be putting up interest rates," he said. He added that the strength of consumer demand, which is "not sustainable into the medium term", is not "an immediate problem" for the British economy. George's comments follow a Confederation of British Industry survey yesterday which found that the economy had recorded the fastest year-on-year sales growth for December since 1987. Retail sales volumes in the first two weeks of the month grew substantially more than expected, with 65 pct of retailers reporting volumes up while only 17 pct recorded a fall. The Bank of England left interest rates unchanged at 4.0 pct last month, deciding against an eighth reduction in borrowing costs in 2001.