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NEW YORK (Reuters) - Persistent output slack and sluggish economic activity will likely keep inflation and interest rates low around the world in the foreseeable future, Bank of America Merrill Lynch economists said on Friday.
"While we think the recent weak inflation readings in the U.S. will only delay the move higher in underlying inflation, for the rest of the world we now see core inflation inching lower rather than higher," the firm's economists Ethan Harris and Aditya Bhave wrote in a research note. "In other words, there is no end in sight for the low-inflation-low-rate environment the global economy has been stuck in since the financial crisis."
Reporting by Richard Leong; Editing by Chizu Nomiyama