The "blood libel" was commonplace among Christians throughout medieval Europe and even later. Essentially, it was the belief, or rather the accusation, that Jews used the blood of Christians in certain religious rites, specifically Passover rituals. In order to obtain this blood, they would supposedly kidnap and murder Christian children.
"The Prioress's Tale" is basically a version of this trope. In it, Jews in a ghetto have a pious young Christian boy murdered after he walks through the ghetto singing a hymn to the Virgin Mary. His body is protected, however, by Mary, who enables the dead boy, by miraculously placing a grain on his tongue, to continue singing prayerful songs until he is brought to a church. There he sings until the grain is removed, and he becomes a holy martyr. Meanwhile, the Jews are rounded up and executed as punishment for their crimes.
As suggested above, "The Prioress's Tale" draws upon an old and insidious trope in Western folklore and literature. The "blood libel," rooted in the belief that Jews were ultimately responsible for the death of Christ, would have been familiar to Chaucer's readers. Given that Chaucer does not entirely sympathetically portray the Prioress—she has obviously worldly concerns—he may have intended to parody the blood libel. It is more likely, however, that Chaucer simply drew upon a theme that would have been familiar to his readers.