Since the global financial crisis of 2008-09, the world's central banks have added trillions of dollars to their balance sheets through government bond purchases as they pumped money into their economies.

The research, co-authored by the Bank policymaker David Miles, showed central banks should be able to wind down that stimulus without major disruption.

"(If) the unwinding of large-scale purchases happens when market conditions are more normal they may have relatively little impact on asset prices and the real economy," the study said.

The study also showed that one of the channels through which quantitative easing might work - by affecting the way that households invest - probably only has a weak effect when markets are functioning normally.

Chancellor Mark Carney last month said Britain had come to the end of its 375 billion pounds (375 billion pounds) quantitative easing programme, barring any additional shocks to the economy.

Instead, the debate is now focused on when the Bank will raise interest rates as Britain's economic recovery gathers further momentum.

Minutes from the Bank's latest policy meeting will be released on Wednesday and offer the Bank a chance to tweak its message to the markets.

More than a third of economists polled by Reuters last week expect the Bank to set the stage for it to lower the unemployment threshold to 6.5 percent from 7 percent - a move that will reinforce its message that it will keep rates lower for longer.

The Bank has said it will not consider hiking interest rates from their record low of 0.5 percent until the goal is met.

For the full paper by David Miles and Jochen Schanz titled "The relevance or otherwise of the central bank's balance sheet", see http://www.bankofengland.co.uk/research/Documents/externalmpcpapers/extmpcpaper0041.pdf ($1 = 0.6081 British pounds)

(Reporting by Andy Bruce; Editing by Ruth Pitchford)