Bird,
More details are needed.
What bullets are you trying?
How close to the lands are you seating the bullets?
What powder and charge weight is being used?
Primer strength?
Full length sized or neck sized?
Type of rest involved in your testing?
Scope power? And is the scope reliable?
How good has the rifle shot? Better than 1 1/4" or is that the best its ever done?
What stock does your 700 have? Wood, Laminated wood, plastic, HS precision, Hogue, Bell & Carlson, ect? You may not improve over what the factory sent it out in. Been there-put a lot of time & effort into improving my bedding-wound up with a worse shooting rifle for my efforts.
As was mentioned, 1 1/4" may be the best it can do and there's nothing wrong with a 1 1/4" gun, that level may the best your gun is capable of. Every deer I've ever shot would have fallen to (and some did) to guns of that accuracy level.
I have a 7-08 Improved that wouldn't group under 1 1/2" for nearly 10 years of on & off again load testing. I loved hunting with it because of the stock design fitting me well. 3 deer I distinctly remember and possibly more fell to it with out them knowing the gun only shot 1 1/2".
Hypothetically, a 1 1/4" rifle will keep a kill shot on an average whitetail out to well over 600 yards. And, in spite of what some internet keyboards claim, that is beyond the real life range of 95% of shooters. In order to consistently hit first shot vitals at 600 and beyond you must either be extremely lucky or have specialized equipment including a very accurate rangefinder, windmeter, and accurate bullet drop tables set for the temperature, humidity, wind deflection, barometric pressure, elevation, and still be very lucky.
Personally I have only shot one deer over 500 yards, and I have all the necessary equipment. The vast majority have been from 20-100 yards. I prefer to take my shots as close as possible to eliminate "Murphy" from coming into the equation.
FWIW