We expect global growth to pick up gradually during the coming two years as private sector spending accelerates and fiscal austerity eases. Among advanced economies, the US will lead the recovery, whereas the euro-zone faces a period of stagnation. Emerging economies will probably continue to grow at a fairly moderate pace. Inflation should remain very low, given that there is still substantial spare capacity and that commodity prices remain weak. The Fed and Bank of England will probably begin to raise interest rates next year, but we suspect that the ECB and Bank of Japan will loosen policy further.
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