Bank of England brains of the future - the youth view on monetary policy

School pupils, Annie Asquith, Stuart Duffy, Calum Grant and Daniel Gross with Charlie Bean, Deputy Governor at the Bank of England
Image caption The winning team could perhaps become tomorrow's policy makers?

A Bank of England youth policy - the idea of governor Sir Mervyn King 13 years ago - is taking shape.

School pupils are given a chance to play the part of policymakers, deciding where interest rates should be and then making detailed presentations.

The Bank of England's Target 2.0 competition, named after the 2% inflation target, involves regional heats and then a final at the Bank.

This year's winner was The Grammar School at Leeds.

Ahead of this week's monthly meeting of the Monetary Policy Committee, we caught up with the successful students to find out their opinions on interest rate policy, quantitative easing and all the other complex areas covered by the Bank.

Team members Annie Asquith, Stuart Duffy, Calum Grant and Daniel Gross, all aged 18, took time out from their A level studies to make their pitch at the Bank of England.

In front of the judges, including deputy governor Charlie Bean and other Bank policymakers, they advocated keeping interest rates on hold at 0.5% and another £50bn of money creation to take the total to £425bn (the quantitative easing policy).

The Leeds students are clearly bearish about the outlook for the economy.

"The current challenge is gigantic, with debt increasing and an ongoing banking and eurozone crisis," said Daniel.

And Stuart had this advice for the incoming governor Mark Carney: "Don't start changing the mandate - and don't pull out of aggressively supporting the real economy."

Annie added that constant inflationary pressures combined with very weak demand was going to make it hard to meet the Bank's objectives.

Future economics

So when did they first become interested in economics?

"Reading about the financial disasters of 2007-08, and then discovering about the impact on businesses and individuals," was Annie's response.

"I was lucky to start studying economics in by far the most interesting and unpredictable period of economic activity in recent memory," said Calum.

There are no prizes for guessing what Team Leeds members want to study at university.

Annie has an ambition of becoming a fully qualified accountant after her degree.

Calum has considered becoming a journalist for a publication like The Economist after studying economics.

'Incredible' victory

And how about the pressure of making their 20-minute presentation, complete with slides, and fielding questions from the judges?

Image caption In the corridors of power, Stuart Duffy, Annie Asquith, Calum Grant and Daniel Gross

"The final day was a nerve-wracking experience, but enormous fun," said Stuart.

"And I had the confidence to crack a QE related joke (a rare occurrence and a very risky move!)"

The reward for their efforts is a £10,000 prize for the school, a trophy, an ebook reader each and a week's internship at the Bank of England in the summer.

Annie is looking forward to coming back.

"Winning was incredible, to know that our hard work had been recognised and that we would have the chance to discover the inner workings of the Bank in the summer," she said.

Future policy makers

For The Grammar School at Leeds, winning capped a runner-up spot last year.

Head of economics, Chris Law, was justifiably proud of his pupils.

"The day of the final itself is an extraordinary test of resourcefulness and nerve, perhaps worse for the teachers than the students given that we must sit on the sidelines like football managers," he says.

"And though it sounds corny, seeing the pleasure of the students at the moment of winning makes it all worthwhile."

Chris believes that preparing for and taking part in the qualifying rounds and final of Target 2.0 is the best possible way to take students from a "hesitant textbook understanding" to a confident independent-minded grasp of the subject.

It's possible that Annie, Stuart, Calum and Daniel could yet be policymakers making real presentations and decisions on interest rates a couple of decades down the line.

And who knows what will have happened to the QE policy by then.

Hugh Pym was one of the judges for Target 2.0. The runners-up in this year's final were St Paul's School, Barnes and Tonbridge School.

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