Zero net migration would shrink UK economy by 3.6%, says thinktank
Jump of £37bn in budget deficit by 2040 would force government to increase taxes, NIESR predicts
The UK economy would be 3.6% smaller by 2040 if net migration fell to zero, forcing the government to raise taxes to combat a much bigger budget deficit, a thinktank has predicted.
The National Institute of Economic and Social Research (NIESR) said falling birthrates in the UK and a sharp decrease in net migration last year had led it to consider what would happen if this trend continued to the end of the decade.
In this scenario the UK population would stop growing at about 70 million in 2030. The latest official figures showed the UK population was 69.3 million in 2024.
Dr Benjamin Caswell, a senior economist at NIESR, said: “Net zero migration leaves the economy 3.6% smaller by 2040 and this reflects slower employment growth and a smaller workforce.”
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The forecast came after a sharp fall in net migration in 2025, from 649,000 to 204,000 in the year to June, after a tightening of work visa requirements by the Conservative government.
Additional measures by the Labour government around recruiting foreign workers within health and social care may bring down migration further, NIESR said. At the same time, the number of births and deaths in the UK have been more or less equal since the start of the decade, with any change in the UK population being driven by migration.
