• "The real problem is if inflation proves to be higher, uncomfortably higher for uncomfortably long," Borio said.
• However he stressed that BIS — which aims to foster coordination among central banks — expects the increase in inflation to be "transitory."

LONDON — The recent surge in consumer prices should be celebrated, Claudio Borio, head of the economic and monetary department at the Bank for International Settlements, told CNBC.

"For those countries … that have been trying very, very hard to get inflation up unsuccessfully, having inflation persistently higher, roughly at target, that would actually be very good news and one should rejoice about that," Borio told CNBC's Julianna Tatelbaum in an interview.

His comments come after inflation readings have beaten expectations in both the U.S. and Europe over recent months — dividing policymakers and rattling financial markets on several occasions.

Some European officials believe the region's pandemic-induced stimulus program should be scaled back in the face of rising prices, while others argue that inflation will be temporary and so monetary policy should remain loose.

Inflation can be a tricky economic indicator: If it is too high, it erases the purchasing power of consumers; if it is too low, it can reduce economic growth. Inflation can also be bad for stock markets as it often leads to higher interest rates, meaning big firms have to pay more to service their debts which can then erode their earnings.

"The real problem is if inflation proves to be higher, uncomfortably higher for uncomfortably long," Borio said.

However he stressed that the BIS — which is known as the central bank of central banks — expects the increase in inflation to be "transitory."

Until recently in the euro zone, inflation has been persistently low in the wake of the global financial crisis and the region's sovereign debt crises. But prices have experienced a massive increase in recent weeks.

Annual Inflation in the euro zone rose to 2% in the month of May, slightly above the ECB's target of "below, but close to, 2%." This has been linked to the easing of various social-distancing rules across the 19 euro nations and consumers' willingness to spend more.

However, European Central Bank President Christine Lagarde has insisted that the uptick in inflation is temporary, and that it will fall back below target in the foreseeable future.

"Inflation has picked up over recent months, largely on account of base effects, transitory factors and an increase in energy prices. It is expected to rise further in the second half of the year, before declining as temporary factors fade out," she said at a press conference earlier this month.

Speaking to CNBC, Borio agreed that "so far, most [of] what is going on is essentially temporary."

"We have one-off increases in prices which are basically bouncing back from where they were before; we're having technical effects, so-called base effects; we're seeing, indeed, there are speed limits to [the] world economy," he added.

The latest ECB forecasts point to a headline inflation of 1.9% at the end of 2021, followed by a decrease to 1.5% and 1.4% in 2022 and 2023, respectively.

In the BIS latest annual report, released Tuesday, the institution said that "normalising policy will not be easy" for central banks.

This subject has already sparked some divisions within the ECB, with hawkish member Jens Weidmann pushing for the coronavirus-stimulus program to be lifted step-by-step.

Whereas other ECB members are worried about a premature scaling back of the program.

Correction: This article has been updated to correct the spelling of Claudio Borio, head of the economic and monetary department at the Bank for International Settlements.