As global equities retreated sharply, the 10-year gilt troughed at 2.072 percent, its lowest level since Oct. 16.
At 1505 GMT it was at 2.0 percent - down around 5 basis points on the day and on track for its biggest fall this week.
The five-year British government bond yield also touched its lowest level since Oct. 16.
British government bond prices were boosted last week by forecasts from the Bank of England that showed a weak outlook for inflation and by comments from its governor, Mark Carney, who said markets were right to price in looser monetary policy.
Gilts showed little reaction to better-than-expected British retail sales data. But yields dropped sharply on the publication of a German survey of purchasing managers that augured poorly for an already troubled euro zone economy.
The yield spread between 10-year gilts and the equivalent German Bund fell on the day by 1 basis point to 128 basis points, its lowest level in about a month.
Demand was strong at an auction of 900 million pounds of the 0.625 percent index-linked gilt due 2042, attracting bids 2.14 times the amount on offer - the highest demand at a linker auction since Aug. 6.