Speaking at a meeting of the Black Country Chamber of Commerce, Mr King insisted that the government has no choice but to embark on a cautious fiscal policy and must alter the present balance between imports and exports.
"We need to sell more to, and buy less from, economies overseas," he explained. "Such an adjustment is unlikely to be smooth. The path for the economy will be bumpy."
Mr King added that greater prudence is required to ward off the threat of protectionism and claimed there is a worldwide consensus on the need for "global rebalancing".
His comments came after Chicago Federal Reserve president Charles Evans suggested that the US central bank may need to intervene further to stimulate economic activity.
By Gary Cooper