Only a surprise will halt December Fed rate hike - Bullard

* Bullard says December rate increase may get Fed in neutral gear

* Spike in dollar within acceptable range

* Trump election win not generated predicted volatility

* Low global rate era not coming to abrupt end (Adds quotes, detail, background)

By Marc Jones and John Geddie

LONDON, Nov 16 (Reuters) - The Federal Reserve will hike U.S. interest rates in December barring any major shocks, policymaker James Bullard said on Wednesday, adding that a single rate increase may be enough to move monetary policy to a "neutral setting".

Bullard also said that the Fed would need to respond to any economic uncertainty created by "political actors" but that global markets had reacted more calmly than some had predicted to Donald Trump's shock U.S. presidential election victory.

"You would have to have a surprise at this point," for the Fed not to increase rates, Bullard, who is a voting member of the U.S. central bank's rate-setting committee, told reporters at a UBS (LSE: 0QNR.L - news) banking conference in London.

He said the only reason to hold off would be the kind of big shocks that have given the U.S. central bank pause in the past, such as volatility across global markets or bad U.S. jobs data.

Financial markets expect the Fed to hike next month and have begun pricing in a much more aggressive run of rate increases after Trump promised during campaigning for the Nov. 8 election to boost the U.S. economy with spending on infrastructure.

Bullard said the U.S. dollar and government bond yields remained within the range of the last year even after a post-election jump, while rising inflation expectations had eased some of the Fed's concerns about overly low inflation.

"Equities and foreign exchange rates have been re-priced, but are well within the experience of the past year," he said.

"There were a lot of predictions that if the election went the way of Republicans and President-elect Donald Trump, then there would be great deal of volatility, but that has not materialised so far."

Bullard is considered one of the Fed policymakers more likely to back rate hikes.

But he stressed that while rates would go up if the U.S. economy improves, the era of low global borrowing costs is unlikely to come to an abrupt end.

"We have a low interest rate regime and it is really not expected to turn around and mean revert," he said.

When asked how the Fed would respond if Trump's policies began to destabilise markets and were threatening to dent confidence in the economy he said: "We would have to cope with that the best we can.

"If you had political actors that were creating uncertainty we would have to react to that," he added, stressing the scenario wasn't his "base case". (Reporting by Marc Jones; Editing by Catherine Evans and Hugh Lawson (Other OTC: LWSOF - news) )