The UK public�s overall forecast of inflation over the next 12 months has tumbled to just 2.9% in the latest monthly survey, from 4.4% in September, signalling a firm belief that it will plunge from its current level of 5.2% as recession kicks in.

The UK public's overall forecast of inflation over the next 12 months has tumbled to just 2.9% in the latest monthly survey, from 4.4% in September, signalling a firm belief that it will plunge from its current level of 5.2% as recession kicks in.

The survey from banking giant Citigroup and pollster YouGov should dispel any lingering concerns about inflation among members of the Bank of England's Monetary Policy Committee, as financial markets and economists anticipate big cuts in UK base rates to pull the economy out of the mire. The fall in people's expectation of benchmark annual consumer prices index inflation, on a 12-month time horizon, was the biggest monthly drop since the survey began in 2005.

It comes at a time when oil prices have been falling sharply, and surveys and official data have pointed firmly to UK recession.

Inflation expectations peaked at 4.6% in June on the survey. This month's 2.9% figure is the weakest forecast from the UK public this year.

The Bank of England's Monetary Policy Committee, which is expected to follow this month's half-point cut in UK base rates to 4.5% with further significant reductions, is charged with keeping annual CPI inflation at 2%.

Howard Archer, chief UK economist at consultancy Global Insight, said: The sharp retreat in inflation expectations evident in the October Citigroup/YouGov survey dilutes one of the last remaining concerns about medium-term inflation pressures and opens the door even wider to the aggressive interest-rate cuts that are needed by the Bank of England to try and help ensure that the recession is as shallow and short as possible."

He added: "The sharp re-treat in inflation expectations in October will be of major relief to the Monetary Policy Committee. The MPC had long been concerned that an extended period of markedly above-target consumer price inflation - primarily resulting from higher utility and food prices as well as a markedly weaker pound - could lead to a long-lasting rise in inflation expectations.

"Clearly, this is not the case as people increasingly worry about recession. The recent sharp fall in oil prices will also have helped bring down inflation expectations, as well as growing belief that worried shops will increasingly be forced to discount to get hard-pressed consumers to spend."