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It was a week in which investors were focused on important central bank decisions. There were no major surprises when borrowing costs at home and across the pond were kept unchanged, as rate-setters weighed up economic conditions beset by inflationary pressures and sky-high levels of uncertainty.
That uncertainty, underpinned by the prospect of all-out global trade war and a US recession, has served certain safe-haven assets well. Gold (GC=F) has been the main beneficiary, logging another week of record-breaking moments above $3,000 an ounce.
As UK investors look ahead to the chancellor's spring statement next week, there was a blow for Rachel Reeves as figures revealed government borrowing in February was well above expectations.
Key moments from last week
Bank of England holds interest rates at 4.5%
It was an almost unanimous decision, with the central bank’s policy committee voting 8-1 to keep the status quo.
While it marked a setback for mortgage holders, who had been hoping the BoE would continue reducing borrowing costs as it had been since the summer, governor Andrew Bailey implied rates were still on their downward trajectory.
"Since the MPC’s previous meeting, global trade policy uncertainty has intensified," he added. "Other geopolitical uncertainties have also increased and indicators of financial market volatility have risen globally."
Retail investors rush to gold amid record high prices
Markets expect the precious metal's unprecedented rally to continue as geopolitical turmoil driven largely by US president Donald Trump's tariffs continue to support prices. City Index analyst Matt Simpson believes gold futures could hit $3,200 in the next few weeks.
Unlike paper assets or digital currencies, physical gold is tangible, offering a sense of security that is hard to replicate — an allure that is attracting individual investors in their droves.
Rachel Reeves under pressure as UK government borrowing overshoots
In February the government borrowed £10.7bn, according to Office for National Statistics figures released this week. The startling amount was much higher than the £7bn forecast by City analysts.
This won't have pleased the chancellor, who is set to use her spring statement next week to announce further cuts to government spending in an effort to maintain fiscal discipline. Under her fiscal rules, Reeves is committed to balancing the current budget, which excludes government investment, by 2029-30.
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