Zero net migration would shrink UK economy by 3.6%, says thinktank
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.”The thinktank said that initially real wages and disposable income would rise as firms would be forced to use more machinery and become more productive, with GDP per capita rising by 2% by 2040.However, these gains would come at the cost of weaker growth in the economy overall as a smaller and ageing population would lead to fewer tax revenues, opening up the gap between public spending and receipts and causing the government to borrow more.
“Imagine it as like freezing the population where it is, and then just having a continually ageing population,” Caswell said.“In the short to medium term, it’s not too detrimental, but over 20 years this gap [in spending and receipts] becomes continually larger and larger.”The thinktank said the government would fill this gap by borrowing, which would cause the budget deficit to increase by about 0.8% of GDP, or £37bn, by 2040.This forecast is based on the assumption that government spending and tax rates up to 2030 follow the path estimated by the Office for Budget Responsibility (OBR), the UK’s official forecaster, and then the share of government spending as a ratio of GDP remains constant thereafter.
The thinktank said that certain payments, such as child benefit or jobseeker’s allowance, would adjust following these changes in the population, but that government investment and consumption would not alter greatly.Caswell said that unless the fertility rate picked up, then 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 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.
From Dorset to the world: wave of donations helps to secure Cerne giant’s home
It feels like a very British monument: a huge chalk figure carved into a steep Dorset hillside that for centuries has intrigued lovers of English folklore and legend. But an appeal to raise money to help protect the Cerne giant – and the wildlife that shares the landscape it towers over – has shown that its allure stretches far beyond the UK.The Guardian’s journalism is independent. We will earn a commission if you buy something through an affiliate link. Learn more
‘We put a stink bomb in Stephen Fry’s shoe’: Vic and Bob on the inspired idiocy of Shooting Stars
‘Christians complained about the stuffed buzzard wearing a crucifix round its neck. Birds can’t be Christians, they said. It’s the most complaints we ever got’The first time I saw what was to become Shooting Stars was Vic Reeves – AKA Jim Moir – doing The Big Quiz during Vic Reeves Big Night Out live. I’d never seen anything like it. It was full of meaningless questions and had an attitude
Sydney Biennale 2026: Hoor Al Qasimi unveils expansive program for 25th edition
The Biennale of Sydney has revealed the final lineup details for its 25th edition, scheduled to open mid-March across five key venues, including White Bay Power Station, the Art Gallery of New South Wales and Penrith Regional Gallery.Featuring 83 artists, collaborations and collectives from 37 countries including Australia, the 25th Biennale of Sydney is titled “Rememory” – after the term coined by author Toni Morrison – and will “[explore] the intersection of memory and history as a means of revisiting, reconstructing, and reclaiming histories”.It represents the vision of artistic director Hoor Al Qasimi, the first Arab appointed to the role and the eighth woman in the festival’s 53-year history.Highlights announced on Tuesday include a giant functioning clay oven at White Bay Power Station in Rozelle, created by Argentinian sculptor Gabriel Chaile, which will be activated for the Biennale’s opening weekend and at key moments through the festival to serve visitors Peruvian cuisine. Also for food lovers is a large vat of tabbouleh, created by Lebanese artist Mounira Al Solh as part of a community-based performance in Granville
Meryl Streep is as withering as ever in first full-length trailer for Devil Wears Prada 2
The first full-length trailer for The Devil Wears Prada 2 has been released, and given more details on David Frankel’s hotly anticipated follow-up. In the promo, Meryl Streep’s Miranda Priestly and her right-hand man Nigel, played by Stanley Tucci, are seen reuniting with Anne Hathaway’s Andy and, later, Emily Blunt’s Emily.Priestly remembers neither, nor even her habit of referring to all her fashion magazine assistants as Emily – presumably on account of her withering alpha-editor status rather than, say, dementia.The film’s teaser trailer, which was released in November, was reportedly the most-viewed comedy trailer in 15 years, with 181.5m views on YouTube in its first 24 hours
Letter: Mark Fisher obituary
In his fat 2004 volume Britain’s Best Museums and Galleries, the former arts minister Mark Fisher displayed great enthusiasm and knowledge, dating from museum visits with his father when he was very young. I greatly enjoyed working with him when he was a well-informed commissioner and I was deputy director of the Museums & Galleries Commission.We shared common ground in that I grew up in Stoke-on-Trent, Staffordshire, where he was an MP for from 1983 to 2010. Members of my family have been involved in heritage projects for many years, from museums and historic houses to oatcakes and bottle ovens, and with their advice he was able to intervene quietly and helpfully from time to time in such matters in the city.
Wil Anderson: ‘I honestly believe being mistaken for Adam Hills is one of the great gifts of my life’
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