On Friday 22 November, eight teams from schools all over Cornwall, Devon and Dorset congregated in Exeter to take part in the regional heat of the Bank of England’s Target 2.0 competition.
The competition involved the teams putting themselves in the position of the Bank’s Monetary Policy Committee and outlining their recommendations for UK monetary policy, including setting the Bank rate and deciding what should happen with regard to the current asset purchase scheme (Quantitative Easing). The day marked the culmination of weeks of hard work for the students, as, following much in-depth research into the UK economy, they each had to give a 15 minute presentation to a panel made up of Bank of England employees, and then answer 10 minutes worth of questions from the judges.
The other teams in the heat were: Blundell’s School; Torquay Boys’ Grammar School; Devonport High School for Boys; Bryanston School; The Blandford School; Plymouth College; and Torquay Girls’ Grammar School.
Truro School’s team consisted of M. Fletcher, S. Hosie, B. Steen and D. Yau (with B. Ajose-Adeogun, B. Braithwaite and J. Chan having helped with research beforehand). They recommended an interest rate of 0.5% compared with the Bank of England’s official rate of 0.5%, but advocated letting QE be run off gradually through the non-renewal of maturing debt, compared with the £375 Billion of asset purchases agreed by the MPC on 7 November 2013.
All of the team spoke excellently, and – perhaps most impressively – answered some tough questions on the Bank’s forward guidance, the extent to which they thought household leveraging was occurring in the UK, the effect of rumoured tapering in the US on financial markets, whether there would be any merit to allowing inflation to fall below target, and the meaning and measurement of ‘permanent income’ and ‘business confidence’.
At the end of the day, Truro School were announced as the winners, with Plymouth College the runners-up. This means Truro School now go through to the South West Area Final to be held in February 2014. Winning this would mean a guaranteed prize of £1,000 and a place in the National Final, to be held in the Bank of England in London in April 2014, with a first prize of £10,000 on offer.
Head of Business Studies and Economics