LONDON, Sept 22 (Reuters) - Policymakers must get the timing right on when to start unwinding economic stimulus measures, or risk curbing a recovery or fuelling inflation expectations, Bank of England Deputy Governor Charles Bean wrote in a paper in May.
"Judging the timing of this will not be easy: exiting too early will nip the recovery in the bud; exiting too late will result in building inflationary pressures and perhaps another asset price/credit boom," Bean wrote in a document presented at a G20 central bankers' workshop earlier this year.
The Bank of England published the remarks and other central bankers' contributions late on Tuesday.
He warned that governments should not be tempted to inflate away their soaring debt levels by raising the inflation targets central banks are required to maintain.
"Moreover, the escalation in public debt raises the incentive for governments to adopt higher inflation targets and there is consequently a risk that inflation expectations and long-term interest rates may start to rise even before demand growth has recovered. Retaining a credible commitment to low inflation is therefore paramount," Bean wrote.
The BoE is tasked with keeping consumer price inflation at 2 percent over the medium term -- a level set by the government and confirmed each year.
Bean also said that countries needed to address the imbalances in the global economy -- an issue that is high on the agenda at this week's meeting of G20 leaders in Pittsburgh.
"It is unlikely that the rest of the world will be able to continue to rely on the U.S. as the global consumer of last resort," Bean wrote.
"That means the rest of the world, especially the surplus countries, will need to generate more demand domestically if global activity is to be maintained. The public sector can fill the gap for a while but a long-run solution requires structural changes that facilitate higher private spending.
"Action needs to start now if we are not to find ourselves still facing the same old problems in a decade's time." (Reporting by Fiona Shaikh; editing by Stephen Nisbet)