It is becoming more likely that the severe deadline would drive funds out of positions that were only maintained because the BOE intervened last month to purchase gilts.
There are rumours that investors would withdraw money from pension funds, which would result in more sales.
According to Laura Fitzsimmons, executive director of macro rates and FX sales at JPMorgan's Australian business in Sydney
The BOE has given investors a relatively limited period of time for the magnitude of these holdings, so there may be contagion worries.
There would be worries about spillover into forced sales elsewhere in markets that are a little bit more illiquid.
Following Bailey's remarks at the annual conference of the Institute of International Finance in Washington on Tuesday, Treasuries decreased.