Blood libel, in its various forms, is a lie that has circulated repeatedly through European and Muslim history. It boils down to the accusation that Jews, as part of their religious rituals, sacrifice Christians. Its most common, though apparently not original, form is that Jews have to sacrifice Christian children to get their blood to make their matzohs for Passover. Arguably another frequent variation was the accusation that various plagues and illnesses were caused by Jews poisoning the wells, though this is somewhat different because it takes out the ritual aspect and this is not a condemnation of the religious practices of Jews per se.
Many anti-Semitic memes go WAY back, often as far back as the Roman Empire. There were two particular periods when the Roman Empire became particularly anti-Semitic. The first was during the period of the Jewish rebellions against Roman rule, mainly under Nero (this was the revolt that made the name of Vespasian, allowing him to become Emperor) and then under Hadrian. The second, more virulent period with the most impact on later history was after the Roman Empire became officially Christian.
But the blood libel version of anti-Semitism seems of later origin, from 12th century Western Europe. Though there do seem to be a couple of more ancient examples of blood libel (one originating among Greeks, who often in urban settings like Alexandria had a particularly nasty rivalry with Jewish communities, and the other another originating among Christians after the Roman Empire became officially Christian), one incident in particular in England seems to be the main origin of most of later blood libels. See below for more...
Interestingly I haven't seen mention of this particular incident in my many readings about Jewish history, though it is mentioned in the Wikipedia article on Blood Libel, though there it isn't given the historical prominence that it gets in another historical reference I have read where it is placed as a major origin for European blood libels.
From England Under the Norman and Angevin Kings, 1075-1225 by Robert Bartlett:
Among the vehicles of this new bigotry was the accusation of ritual murder raised against the Jews. England has the sad distinction of being the site of the first such case. In the week before Easter in 1144, according to the fantasy fabricated the Norwich monk, Thomas of Monmouth, the Jews of Norwich seized a young apprentice called William, tortured him and killed him, then dumped the body in a nearby wood. the murder was not a piece of random savagery but a part of an international Jewish conspiracy:
their ancient writings said that the Jews would never obtain their freedom nor return to the land of their fathers, without the shedding of human blood, Hence it was an ancient custom of theirs that every year they must sacrifice a Christian in some part of the world to the most high God in scorn and contempt of Christ. [T. Momm., V. William 2. 9 (p.93)]
...Although William's status as a martyr was, in fact, not established without some signs of skepticism, a tradition was born. The Norwich case was the first involving an accusation of ritual murder directed against the Jews but it was not the last...
One thing that astonishes me about these accusations, ancient, medieval or modern, is how obviously stupid they are. I mean just how did the supreme idiot Thomas of Monmouth think this international Jewish conspiracy coordinated around the world? Maybe those medieval Jews just take out their cell phones and say, "Hey, comrades! This year lets do the annual sacrifice in Norwich, England."
But such libels work because demagogues, either through spreading their own stupidity or cynically using lies to influence others, aim their lies at ignorant segments of the population. It reminds me a great deal of Rush Limbaugh's lies aimed at his audience.
It is sad that some of the dumbest and most destructive lies take on lives of their own, echoing through history and leading to deaths and tragedies long after the fools that initiated them are dead.