Bank of England CHALLENGE
‘Target Two Point Zero - The Interest Rate Challenge’, an annual competition run by The Bank of England and The Times newspaper, gives teams of students aged 16-18 the chance to take on the role of the Bank of England’s Monetary Policy Committee, assess economic conditions and the outlook for inflation and tell panels of judges what monetary policy they would set to achieve the Government’s inflation target of 2.0%.
Approximately 300 schools throughout the country compete each year in a number of regional heats. We students in the MPW team (Van Nguyen, Konysbek Dairabekov, Zoe Tan and Sebastian Cubbon) were allocated to the Richmond region and won through against Tiffin, Godolphin and Latymer, Ibstock Place, Haydon, LEH and KCS. The success that we were able to achieve in this competition was a result of teamwork, determination, and pragmatism. As soon as the team was put together, we shared the workload evenly, which made the final piece of work as detailed as possible. Our individual tasks were clearly set, which was essential: Financial Markets, Supply and Costs, Demand and Output, the International Economy. Every member had to specialise and produce a presentation on one of these areas, in relation to the inflation target.
The day of the presentation was nerve-racking but very stimulating and enjoyable at the same time. We were able to genuinely learn from the other schools’ presentations, whilst at the same time feeling confident about ours. The challenge of presenting and defending our ideas in front of a panel was exciting and we feel we have benefitted immensely from this: our research and analytical skills have developed greatly. The moment when the judges announced we had won our heat made us feel extremely proud: to have our work recognised and commended by professional economists was hugely satisfying.
Being in the area finals really pushed us beyond our boundaries: to think outside the box and come up with the most exceptional policy recommendation. Each of the team members was responsible for each of four different aspects of the economy: money and financial markets, demand and output, supply and labour, and international influences. The challenge of the second round was to synthesize all these different indicators of the strengths and weaknesses of the UK’s recovery to
deliver our policy recommendation, which was to raise the Bank’s base rate by 0.1% while keeping the stock of asset purchase the same.
Although we did not progress beyond the area finals, the process allowed us to gain a thorough understanding of current economic issues and gave us the opportunity to carry out primary research in Canary Wharf and speak to prominent economists and editors, such as Professor John Kay. Most importantly, we learned to question conventional ideas and to look at information, even that given by the Bank, with a critical eye. This truly heightened our genuine interest in economics as a subject as well as its real-life application. The skills we have gained and honed through the competition – of critical analysis, public speaking, building coherent arguments and teamwork – will be most valuable for our future studies and careers.