Gilts rallied on Wednesday after the Federal Reserve said US economic recovery had lost pace, and on expectations the Bank of England will put out a similar statement at 10.30a.m.
"Changes to the US Federal Open Markets Committee statement indicate that the Fed has lost some confidence in the strength of the recovery," said Barclays in a note to investors.
Slow economic growth indicates interest rates are not likely to go up, making investors snap current bonds -as new bonds bearing a higher interest are unlikely to be issued. Bond prices and yields move in opposite direction.
The price of Britain's ten-year gilts rose, pushing their yield down to 3.2%, the lowest level since April last year.
In the US, the 10 year yield also fell 6 basis points to 2.76%, while the 2-year bond hit a new low of 0.505%.
Investors are worried of a "Japanisation" of the US economy, emulating the low growth and deflation seen in Japan in the 1990s.
