Fidelity's Wells: UK could be first developed nation to hike rates

The UK could be the first developed country to raise interest rates, with a hike coming as soon as next year, according to Fidelity fixed income head Andrew Wells.

Wells, global CIO of fixed income at Fidelity Worldwide Investment, pointed to the higher level of structural inflation in the UK as a potential driver of such a change. He contrasted that level with the subdued price pressures seen in the US and the near-deflationary environment in the eurozone. Headline levels of inflation emphasise this point: despite UK CPI inflation falling back to 2.2% last month, the figure has remained at around 2.7% for the vast majority of 2013. That compares to a current US inflation rate of 1%, while Europe's CPI figure is just 0.9%. Wells said the n...