After a year of momentous change for the Bank of England, its Governor, Eddie George, says that he is "very happy" about the Bank's new role.

Bank of England Governor, Eddie George, discusses the Bank's new role and next year's interest rates (1'23")

Changes, which grant the Bank independence in setting interest rates but revoke much of its traditional role of bank supervision, provide the UK with a "very coherent central banking structure", Mr George said.

"The Bank will clearly be responsible for monetary stability - subject to the Government setting the objective - and for the financial stability of the system as a whole. And I am very happy about the situation that we are entering the new year with."

But if he was pleased about the new central role of the Bank, he was less happy about what he sees going on in the High Street, and its possible effect on inflation.

Mr George said it was unlikely that consumer spending could continue to grow at its current rate of about 4% per year.

"We've seen over the past 12 months domestic demand growing at an unsustainable rate. We know that the economy has to slow down next year because that is unsustainable and would lead to inflation."

But he denied that meant that the interest rates would stay steady and was tight-lipped about whether interest rates would rise.

"I honestly couldn't tell you one way or the other at this stage," he said.

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