A dramatic new warning has sounded over Britain’s economic future, with experts saying net zero migration could shrink the economy and force taxes higher. An influential think tank says the hit to public finances would be severe. The shock message: fewer migrants could mean a smaller workforce, weaker growth, and a painful funding gap.

The National Institute of Economic and Social Research (Niesr) delivered the stark assessment in its latest economic outlook report. It said a move to net zero migration would “put pressure on the public finances.” That pressure, it warned, could leave the government scrambling to raise taxes or borrow more.

Net migration measures the balance between people arriving long-term and those leaving. Net zero would mean arrivals and departures are equal. Recent figures suggest that scenario is moving closer.

Official data shows net migration fell to 204,000 in the year to June. That is a sharp 69% drop year-on-year. Some forecasters now say Britain could hit net zero before the end of the decade.

Niesr said that shift would slow employment growth. It would also reduce the share of working-age people in the population. The result, the think tank warned, would be lower tax revenues flowing into the Treasury.

With less money coming in, ministers would face tough choices. Taxes could be raised to plug the growing funding gap. Alternatively, the government could borrow more.

Higher borrowing, Niesr said, would increase the budget deficit by around 0.8% of gross domestic product. That is equivalent to about £37 billion in today’s prices by 2040. The long-term impact on the public finances would be significant.

By contrast, if net migration stayed positive, the picture would look different. A larger working-age population would broaden the tax base. That would help stabilise the ratio of debt to GDP, the institute said.

Stephen Millard, Niesr’s deputy director for macroeconomics, was blunt about the risks. He said the analysis “clearly shows” that net zero migration would worsen the public debt outlook. The warning adds fresh weight to the migration and economic debate.

He also drew an international comparison. Unlike Japan, he said, the UK lacks the institutional and financial conditions to support a much higher debt ratio. That means Britain has less room for error if revenues fall.

Millard urged the government to act. He said ministers should make a concerted effort to get public debt down. That would give the UK more room to respond to a sharp fall in migration or any other negative economic shock.

The report also downgraded expectations for growth. Niesr now expects GDP to grow by 1.4% in 2025. That is down from the 1.5% forecast made in November.

Looking further ahead, the think tank predicts slower growth. It expects GDP to slow to 1.3% in 2027 and 1.1% in 2028. Rising taxes and weaker growth in government spending are expected to weigh on the economy.

Unemployment is also forecast to rise. Niesr predicts it will peak at 5.5% in the second half of 2026. After that, it is expected to gradually decline.

There is some relief on interest rates. The think tank is forecasting two cuts this year. It expects rates to fall to 3.25% by the end of 2026 as inflation eases.

Key Takeaways

• Niesr warns net zero migration could shrink the economy and hit tax revenues.

• The think tank says the funding gap could mean higher taxes or £37bn more borrowing by 2040.

• Growth forecasts have been cut and unemployment is expected to peak at 5.5% in 2026.

Reaching net zero migration would squeeze public finances, warns think tank

31 minutes ago, bannork said:

fewer migrants could mean a smaller workforce, weaker growth, and a painful funding gap.

I thought AI was going to replace everyone?

So why import more people?

And how many Grab delivery drivers does the UK actually need?

19 minutes ago, BritManToo said:

I thought AI was going to replace everyone?

So why import more people?

And how many Grab delivery drivers does the UK actually need?

Blimey, BMT, there's quite a few jobs that AI can't do:

Nurses, doctors, care workers, social workers, firemen, police, paramedics, builders, electricians, plumbers, mechanics, shopkeepers/workers, barmaids, musicians, artists, artisans, teachers, etc.

10 minutes ago, bannork said:

Blimey, BMT, there's quite a few jobs that AI can't do:

Nurses, doctors, care workers, social workers, firemen, police, paramedics, builders, electricians, plumbers, mechanics, shopkeepers/workers, barmaids, musicians, artists, artisans, teachers, etc.

I don't think many of the immigrants have the education, training or language skills for most of those jobs.

Doctors and teachers can be done by AI.

21 minutes ago, BritManToo said:

I don't think many of the immigrants have the education, training or language skills for most of those jobs.

Doctors and teachers can be done by AI.

As of June 2025, approximately 21% of NHS staff in England (roughly 325,000 out of 1.5 million) are of a non-British nationality.

280,000 to 300,000 non-UK born workers were employed in the UK construction industry as of 2020-2022, representing roughly 13% to 14% of the total workforce. In London nearly half the workforce are not from the UK.

I don't see why immigrants can't be firemen or do other physical jobs.

You will still need teachers and doctors. A classroom needs an adult in charge. A patient in hospital needs to have a doctor talk to them.

O course you could argue, and I would agree with you, what about the 1.84 million unemployed UK nationals?

Couldn't they work, or are they all suffering from high anxiety?

3 hours ago, BritManToo said:

I thought AI was going to replace everyone?

So why import more people?

And how many Grab delivery drivers does the UK actually need?

Grab operate in the UK?

49 minutes ago, Chomper Higgot said:

Grab operate in the UK?

I expect that he meant delivery drivers , rather than specifically Grab drivers

5 hours ago, BritManToo said:

I don't think many of the immigrants have the education, training or language skills for most of those jobs.

Doctors and teachers can be done by AI.

You don’t think is no surprise:

https://commonslibrary.parliament.uk/research-briefings/cbp-7783/

1 hour ago, Nick Carter icp said:

I expect that he meant delivery drivers , rather than specifically Grab drivers

I expect the he said ‘Grab’ he meant ….’Grab’.

2 hours ago, Chomper Higgot said:

I expect the he said ‘Grab’ he meant ….’Grab’.

If you look at the context of his post, its quite easy to tell that he meant delivery drivers in general

9 hours ago, Chomper Higgot said:

You don’t think is no surprise:

https://commonslibrary.parliament.uk/research-briefings/cbp-7783/

I thought you were above personal attacks?

20 minutes ago, BritManToo said:

I thought you were above personal attacks?

Observing studied ignorance on the contribution of immigrants to the UK is not a personal attack.

15 hours ago, bannork said:

Blimey, BMT, there's quite a few jobs that AI can't do:

Nurses, doctors, care workers, social workers, firemen, police, paramedics, builders, electricians, plumbers, mechanics, shopkeepers/workers, barmaids, musicians, artists, artisans, teachers, etc.

The vast majority of immigrant labour is not going into the jobs you mention. There will always be an allowance for entry of skilled workers such as health professionals. No one has suggested the blocking of immigrants who would work as skilled professionals such as engineers, or scientists or researchers etc. It is the vested interest groups and political activists who make your claim.

The UK has an unemployment rate of 5.1%, 1.84 million people. Surely, many of the jobs can be filled by training up the people from this pool? Why not try using them first?

17 hours ago, bannork said:

Niesr said that shift would slow employment growth. It would also reduce the share of working-age people in the population. The result, the think tank warned, would be lower tax revenues flowing into the Treasury.

Absolute nonsense.

We have nearly 2 million unemployed, we don't need more losers and sex pests coming over on dinghys claiming benefits and lording it up in free hotels while stalking the local kids.

If immigration led growth we'd be the world's fastest growing economy. We're not. Our economy is in the toilet and taxes are sky high to pay for all the benefits to the cultural enrichers.

16 hours ago, BritManToo said:

I don't think many of the immigrants have the education, training or language skills for most of those jobs.

Doctors and teachers can be done by AI.

No they can't! AI could be helpful but can't replace either of those roles! I hope you're not serious....

8 hours ago, Nick Carter icp said:

If you look at the context of his post, its quite easy to tell that he meant delivery drivers in general

I think you are underestimating the pedantry of Higgot.

16 minutes ago, Chutney said:

No they can't! AI could be helpful but can't replace either of those roles! I hope you're not serious....

Not quite yet.....but it will happen.

33 minutes ago, JonnyF said:

I think you are underestimating the pedantry of Higgot.

I do accept Nick needs all the help he can get, but I’m not sure you are up to the task.

40 minutes ago, JonnyF said:

Absolute nonsense.

We have nearly 2 million unemployed, we don't need more losers and sex pests coming over on dinghys claiming benefits and lording it up in free hotels while stalking the local kids.

If immigration led growth we'd be the world's fastest growing economy. We're not. Our economy is in the toilet and taxes are sky high to pay for all the benefits to the cultural enrichers.

Because of course in Jonny’s mind all immigrants to the UK are sex pests arriving in dinghys, claiming benefits, lording it in hotels while stalking local kids.

Just another example of the dystopian alternative reality you choose as the residence for your own head.

3 minutes ago, Chomper Higgot said:

Because of course in Jonny’s mind all immigrants to the UK are sex pests arriving in dinghys, claiming benefits, lording it in hotels while stalking local kids.

Just another example of the dystopian alternative reality you choose as the residence for your own head.

Strawman. Never said they all are. But too many are. Not surprising when they come from Iraq, Afghanistan, Pakistan etc. if you look at the issues of women's rights in those countries. I thought you cared about the safety of women? Or was that fake as well?

With 1.8 million unemployed and migrant hotels full, why do we need to bring more?

And where are the massive benefits to the economy you always pretend will happen? Where are these sunlit uplands you were promising? Immigration is off the charts and the economy is flatlining. What happened C? Was that false as well?

The only benefit your lot like Piers Morgan can come up with are foreign restaurants/food but we have the recipes now.

14 minutes ago, JonnyF said:

And where are the massive benefits to the economy you always pretend will happen? Where are these sunlit uplands you were promising? Immigration is off the charts and the economy is flatlining. What happened C? Was that false as well?

When did I pretend massive benefits to the economy? Link please.

when did I ever promise ‘warm sunlit uplands’? Link please.

Contrary to the dystopian alternative reality you have created for your own discomfort, immigration to the UK has and is falling.

“The difference between the number of people arriving in the country and those leaving was 204,000, down from 649,000, with the fall mainly driven by fewer arrivals for work and study reasons, the Office for National Statistics (ONS) said.”

UK net migration falls sharply with drop in arrivals for...

Provisional figures for net migration to the UK show levels dropped to 204,000 in the year to June 2025.

Is there going to be a shortage of grooming gangs and electric bike phone thieves?

39 minutes ago, Kinnock said:

Is there going to be a shortage of grooming gangs and electric bike phone thieves?

I'm sure the offspring of previous generations of immigrants will take up the slack.

43 minutes ago, Chomper Higgot said:

“The difference between the number of people arriving in the country and those leaving was 204,000, down from 649,000, with the fall mainly driven by fewer arrivals for work and study reasons, the Office for National Statistics (ONS) said.”

You've been banging on about how great immigration is for the economy for years. Are you seriously denying that now?

Fewer arrivals for work and study. Great!! So what are they arriving for then? 😄

Not to mention the millionaires and hard working Brits leaving for countries that have freedom of speech, low crime and lower tax.

Good/wealthy people out. Unknown/poor people in. What could possibly go wrong?

The children of Asian immigrants often outperform natives at school and go into medicine or engineering - not laboring jobs.

29 minutes ago, JonnyF said:

You've been banging on about how great immigration is for the economy for years. Are you seriously denying that now?

Fewer arrivals for work and study. Great!! So what are they arriving for then? 😄

Not to mention the millionaires and hard working Brits leaving for countries that have freedom of speech, low crime and lower tax.

Good/wealthy people out. Unknown/poor people in. What could possibly go wrong?

Immigration is good for the economy.

I’ve never, as you claim ‘ pretended massive benefits for the economy’.

I don’t have your monochromatic view of complex issues.

Now how about those ‘warm sunlit uplands’ you claim I have promised.

Are struggling to keep track of who made what promises?

1 hour ago, Purdey said:

The children of Asian immigrants often outperform natives at school and go into medicine or engineering - not laboring jobs.

That was in the last century. Immigrants arrived to work in the past, now they arrive for benefits and freebies.

57 minutes ago, Kinnock said:

That was in the last century. Immigrants arrived to work in the past, now they arrive for benefits and freebies.

Too bad UK got rid of hard working Poles' immigration! 😄

(I know, that wasn't last century, for most of them)

4 hours ago, Chomper Higgot said:

I do accept Nick needs all the help he can get, but I’m not sure you are up to the task.

Thought process would normally be : Does BM2 have concerns about immigration to the UK or does he have concerns about a specific food delivery company that doesn't operate in the UK .

I thought that you were just pretending to be ....................(I dont want to write word that might upset you , so I will leave it blank

]

In the next few weeks we will finish crossing the T's and dotting the I's of this government is $hit.

Starmer kicking and screaming clutching a bag of Lord Alli's freebies will be turfed out and replaced by wtf' Lammy' as the country descends into migrant hotel wars and Tommy Robinson' is made a knight of the realm 🤔