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The Bank of Canada will hike its key interest rate in May 2015, forecasts the Organization for Economic Co-operation and Development in its latest outlook.

The overnight lending rate has been sitting at one per cent since September 2010 — the longest interest-rate freeze since the 1950s — but economists have been predicting for months that it will rise in mid-2015.

In its November outlook, the OECD says the central bank’s first increase can be expected in May of next year, and rise “steadily thereafter.”

“Monetary policy has been highly accommodative for some time,” the report said.

“Given the uncertainty surrounding the amount of economic slack, the Bank of Canada should maintain its current policy stance for the time being. But it will have to start to withdraw stimulus as remaining slack is progressively taken up.”

The OECD also projects the Canadian economy will grow by 2.5 per cent next year, led by investments and export demand driven by the United States.

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