LONDON (Reuters) - Britons' expectations of the rate of inflation over the next 12 months tumbled to a series low of 0.9 percent in November from 2.9 percent in October, according to a YouGov/Citigroup survey on Friday.

The sharp drop was also the biggest monthly decline since the survey began in late 2005.

Inflation expectations peaked at 4.6 percent in June.

The figures suggest the central bank will be able to continue cutting interest rates to soften the blow from falling economic activity.

"The subdued trend in inflation expectations allows the Monetary Policy Committee to go on cutting aggressively in response to recession and the credit crunch," said Michael Saunders, UK economist at Citi.

The Bank of England has already cut interest rates by 2 percentage points since October. Saunders predicts it will cut rates by a further percentage point next Thursday to take them to 2 percent, their lowest since the early 1950s.

The survey was conducted on November 25-27, just after the government unveiled a cut in value-added tax from 17.5 percent to 15 percent, the lowest allowed under European Union rules.

Expectations of inflation over the next 5 to 10 years inched up slightly to 3.0 percent from 2.9 percent but remained well below the average of recent years.