Four economists from Rydal Penrhos School developed their own monetary policy to achieve the Government’s inflation target of 2.0% as part of a national competition. 
The team took part in the Target Two Point Zero – The Bank of England and The Times Interest Rate Challenge, which encourages students, aged 16-18 to take on the role of the Bank of England’s Monetary Policy Committee to examine the current economic climate and assess the outlook for inflation.
Competing in the Regional Heats against teams from Wirral Grammar School, Sale Grammar, Yale College, Merchant Taylors and Birkenhead School, the Rydal Penrhos team determined that there should be no new quantitative easing; interest levels should be maintained and detailed their measures to provide fiscal stimulus.
The team of Alex Farnell, Richard Roberts, Dominic Hearth and Matham Alhemyari all pupils in the Lower Sixth prepared an extremely professional presentation, despite having not yet covered macro economics as part of their A-Level studies. The group worked outside of the class to research the topic from scratch and to formulate their opinions to develop their 15 minute presentation. The team then presented their interest rate decision and the evidence to support their conclusions to a panel of judges which included Bank of England workers.
The judges thoroughly questioned the team at the end of the presentation to test their understanding of the subject. The team faced questions on the transmission mechanism by which monetary policy works, the impact of the Euro Crisis on UK policy and the time lag effect between policies being introduced and their impact on the UK economy.
The Challenge, which is advocated by the Governor of the Bank of England, Mervyn King provides students with the opportunity to deepen their understanding of the economy and the way in which interest decisions affect economic growth and inflation.