Each year, the Bank of England organises the Target 2.0 competition for A-level economics students. This year Pate’s Grammar School won the competition.
In this guest post on Bank’s blog (https://bankunderground.co.uk) the winning team explains what they would do if they were at the MPC:
We decided as a team to hold Bank Rate at 0.5% and to maintain asset purchases at £375bn. In our view it is not yet time to tighten monetary policy. Though we believe the output gap is small, we feel the economy is yet to reach escape velocity and the Wicksellian natural rate is likely to stay low in the years ahead. We are more optimistic on potential supply than other economists and we think oil prices will stay low.
Escape velocity? Oh no! A level students should be using more economic terms so to speak.
Read the whole thing. It just reads like any other MPC statement. Not sure how should one react reading this. Perhaps, the MPC can be replaced with these young guys. Based on their kind of analysis, one wonders whether you need the kind of army employed by Bank of England.