Highlights
- UK population would stop growing at 70 million in 2030 if current migration decline continues.
- Smaller, ageing workforce would reduce tax revenues despite short-term productivity gains.
- Migration fell sharply from 649,000 to 204,000 in year to June 2025 after visa restrictions.
Falling birthrates and a sharp decrease in net migration last year prompted NIESR to analyse what would happen if this trend continued through the decade.
The thinktank projects the government would fill this gap through borrowing, causing the budget deficit to increase by approximately 0.8 per cent of GDP, or £37 bn, by 2040.
Under this scenario, the UK population would stop growing at approximately 70 m in 2030, compared to 69.3 m in 2024.
Dr Benjamin Caswell, senior economist at NIESR, told The Guardian "Net zero migration leaves the economy 3.6 per cent smaller by 2040 and this reflects slower employment growth and a smaller workforce."
Economic trade-offs
Initially, real wages and disposable income would rise as firms deploy more machinery and increase productivity, with GDP per capita growing 2 per cent by 2040. However, these gains would come at the cost of weaker overall economic growth.
A smaller, ageing population would generate fewer tax revenues, widening the gap between public spending and receipts and forcing increased government borrowing.
"Imagine it as like freezing the population where it is, and then just having a continually ageing population," Caswell explained.
"In the short to medium term, it's not too detrimental, but over 20 years this gap becomes continually larger and larger."
Fiscal sustainability concerns
The forecast assumes government spending and tax rates through 2030 follow Office for Budget Responsibility projections, with government spending as a GDP ratio remaining constant thereafter.
Certain payments like child benefit or jobseeker's allowance would adjust following population changes, though government investment and consumption would not alter significantly.
Caswell warned that unless fertility rates increase, zero net migration "would not be fiscally sustainable for the UK unless there were significant tax rises, and significant tax rises could potentially choke off economic growth."
The analysis follows net migration's sharp decline from 649,000 to 204,000 in the year to June 2025 after Conservative government tightening of work visa requirements.
Additional Labour government measures around recruiting foreign workers in health and social care may further reduce migration.
Births and deaths in the UK have been roughly equal since the decade's start, making migration the primary driver of population change.
