The Challenge
In a team of four assess the state of the economy and the outlook for inflation, and then set the interest rate to meet the Government’s inflation target. You may also want to make a decision on quantitative easing – expanding further, reversing or no change.
The Task
Having made your interest rate decision and prepared your case you will make a presentation to the judges: Mr Gray, Mr Lawfull and Miss Read in the week beginning 11 July. Presentation will be no more than 15 minutes long. The precise format of the presentation is up to the team but it should :
· Examine current economic conditions
· Give an assessment on the outlook for the economy and inflation; and
· Present the teams interest rate decision and supporting evidence to the judges.
You will need to split you team up to look at the following separate areas:
· Money and financial markets – lending, interest rates, exchange rate, shares.
· Demand and output – GDP, business surveys, house prices, retail sales, savings ratio, trade.
· Labour market – unemployment, inactivity, wages, productivity.
· Costs and prices – consumer and factory prices, commodity prices, export and import prices.
After the presentation, the judges will ask a series of questions. It is important that teams confer and that no one dominates the answers provided.
Useful websites:
www.bankofengland.co.uk/education/targettwopointzero - more information and videos
www.bankofengland.co.uk – mpc minutes
www.timesonline.co.uk/targettwopointzero - economic briefings
www.nomisweb.co.uk – free access to UK labour data
Remember to use the top tips contained in your team's pack of resources.
Sounds great does this mean we get to visit the Bank of England? S
ReplyDeleteYes trip planned for July 11th, letters to go out soon. Mr Gray
ReplyDeletei really enjoyed the competition and thought it was a valuable learning experience.
ReplyDeleteI felt that Target 2.0 was a good experience because it helped us to develop our comminication and teamwork skills and also gave us an oppurtunity to apply our economics to the real world. I think that this competition should continue next year because it is a good tool in prepartion for uni and is an excellent achievment to have on your ucas form especially if you want to continue to study economics in uni.
ReplyDeleteInterest rates should increase as it is the only way to acheive 2.0 inflation. Which is the BOE job so that is what they must do. However, this may not be what is best for currently fragile and unstable UK economy so any increases must be done with caution - And may explain why the BOE guys may not do it.
ReplyDeleteAs we mentioned in our presentation, this also reduces our sensitivity to commody price shocks which is something we must do in the unstabe future.
Dan & Hugh.
Thought that it was a challenging and valuable experience....I think that interest rates should be increased because it will help people save more
ReplyDeleteInterest rates should increase as it is the only way to acheive 2.0 inflation. Which is the BOE job so that is what they must do. However, this may not be what is best for currently fragile and unstable UK economy so any increases must be done with caution - And may explain why the BOE guys may not do it.
ReplyDeleteAs we mentioned in our presentation, this also reduces our sensitivity to commodity price shocks which is something we must do in the unstabe future.
Dan & Hugh.