* BoE seen holding rates at 0.5 percent for second month
* Investors hoping for clarity on QE may be disappointed
* Gilt yields surge, futures plunge on jitters
By Fiona Shaikh and David Milliken
LONDON, May 7 (Reuters) - The Bank of England is likely to hold interest rates on Thursday but give little away about the future of its asset purchase scheme, leaving markets on tenterhooks until its new forecasts next week.
The central bank's Monetary Policy Committee is almost certain to leave rates at a record low of 0.5 percent when it publishes the outcome of its monthly policy meeting at 1100 GMT.
That will shift attention to whether it will expand its 75 billion pound ($113.5 billion) quantitative easing programme to boost the supply of credit to the economy.
Gilt prices plunged well over a full point as investors feared BoE policymakers would wait to gauge the impact of the purchases so far before committing to any more, especially as there are signs that the economy may starting to trough.
"There may well be dissent within the MPC on the effectiveness of QE as a policy tool. And with some of the economic numbers having improved, the Monetary Policy Committee will not want to feel tied," said Jason Simpson, strategist at Royal Bank of Scotland.
By 0925 GMT, June gilt futures were 1.3 points down, trading at their lowest since February, just before the BoE announced it was considering embarking on unconventional policy.
Benchmark 10-year gilt yields broke through a key technical level to trade at their highest level since February too.
The central bank is likely to use up its initial fund for asset purchases in the next few weeks but it has leeway to extend the scheme by a further 75 billion pounds if it sees fit.
Policymakers may wait until they publish their new quarterly economic forecasts next Wednesday to explain their plans.
George Buckley, chief UK economist at Deutsche Bank, reckons the BoE may hold off making a decision until its June policy meeting as it is unlikely to have exhausted its fund until then.
"They could announce something after their June meeting, which may be their preference, given they don't like pre-announcing decisions," he said. "I don't think we're going to hear anything from them today. We'll get a short statement but that's about it." ($1 = 0.6607 pounds)