The Bank of England may cut interest rates if the British economy slows sharply this year, according to bank governor Eddie George "If the global economy were to be much more sluggish than we anticipate, if the consumer demand were to moderate more sharply than we currently anticipate, yes, there could be [a rate cut]," George said in an interview with The Herald newspaper in Scotland. He also said that a "sharp" increase in UK interest rates to curb consumer spending was not likely. Strong consumer demand, particularly in the housing sector, has supported the UK economy over the past year. House price inflation in excess of 25pc in 2002 kept the Bank of England's policymakers from lowering rates last year, despite cuts by the Federal Reserve and the European Central Bank However, analysts at AIB say the main question for the UK economy in the year ahead is whether consumer demand can "continue to compensate for a depressed manufacturing sector" Britain's National Institute of Economic and Social Research said this week that it expects the UK to expand below trend this year and noted that the case for a rate cut remains balanced //www.fxcentre.com