LONDON, Dec 11 (Reuters) - Britons' expectations of inflation in the coming year plunged in November from a record high three months previously, a Bank of England survey showed on Thursday.
The BoE/GfK NOP Inflation Attitudes survey showed the median expectation for inflation over the coming year stood at 2.8 percent compared with a record high of 4.4 percent in August.
That was the biggest drop since the survey began in Nov 1999 and probably reflects the sharp drop in energy prices which had pushed up actual inflation to above 5 percent this year -- more than double the BoE's 2 percent target.
When asked to give the current rate of inflation, respondents gave a median answer of 4.9 percent compared with a series-high of 5.4 percent in August -- also the biggest quarterly fall on record.
While policymakers had been concerned earlier in the year that high inflation expectations risked becoming entrenched, those worries have now been overtaken by fears that the British economy is heading into a long and painful recession.
The BoE has already cut interest rate by a total of 3 percentage points since October to just 2 percent and borrowing costs could fall further still.
Analysts say inflation will fall sharply below the 2 percent target and could even head into negative territory as lower energy prices and the reduction in VAT announced last month take effect.
Asked what would be "best for the economy" -- higher interest rates, lower interest rates or no change, 8 percent of survey respondents said rates should go up, 46 percent thought rates should go down and 24 percent thought rates should stay where they are.