Cutting net migration to zero would leave the UK economy 3.6 % smaller by 2040 and widen the budget deficit by £37 billion, according to a report published overnight by the National Institute of Economic and Social Research (NIESR). The think-tank’s modelling—covered by The Guardian—suggests that a smaller, ageing workforce would depress tax receipts faster than public-spending needs fall, forcing future governments either to borrow more or raise taxes.
The study comes as net migration has already fallen sharply—from 649,000 in 2025 to 204,000 in the year to June—after a series of salary-threshold hikes and tighter rules on family and care-worker visas. With both main parties promising still tougher controls, NIESR economists warn that an end-state of net-zero migration would undermine productivity and long-term fiscal sustainability.
In the model, real wages rise modestly at first as employers invest in automation to offset labour shortages, but overall GDP growth stalls. By 2040 the economy is £100 billion smaller than it would be under the Office for Budget Responsibility’s baseline assumption of 245,000 annual net migrants.
![Zero-migration scenario would shrink UK economy by 3.6 % and blow £37 billion hole in budget, says NIESR]()
Amid these shifting forecasts, organisations and individuals seeking clarity on UK entry routes can turn to VisaHQ for up-to-date visa intelligence and application support. Its dedicated UK hub (https://www.visahq.com/united-kingdom/) compiles the latest eligibility criteria, processing times and document checklists, providing a streamlined way to navigate the system as policy parameters change.
The report argues that immigration remains critical to sectors such as health, social care, STEM and advanced manufacturing—areas already facing domestic skills gaps.
For global-mobility and workforce-planning teams the findings reinforce the business case for a balanced, skills-focused migration system rather than blunt caps. Companies reliant on international talent are being advised to engage with the government’s ongoing ‘earned settlement’ consultation and to provide evidence of how labour-market shortages could impede growth or relocation projects if migration falls further.
NIESR concludes that “migration policy cannot be set in a vacuum” and calls for a joined-up strategy that links visa settings, skills funding and industrial policy. Whether that warning gains traction in an election year remains to be seen, but the numbers add economic heft to the debate over the UK’s future migration architecture.
The study comes as net migration has already fallen sharply—from 649,000 in 2025 to 204,000 in the year to June—after a series of salary-threshold hikes and tighter rules on family and care-worker visas. With both main parties promising still tougher controls, NIESR economists warn that an end-state of net-zero migration would undermine productivity and long-term fiscal sustainability.
In the model, real wages rise modestly at first as employers invest in automation to offset labour shortages, but overall GDP growth stalls. By 2040 the economy is £100 billion smaller than it would be under the Office for Budget Responsibility’s baseline assumption of 245,000 annual net migrants.
Amid these shifting forecasts, organisations and individuals seeking clarity on UK entry routes can turn to VisaHQ for up-to-date visa intelligence and application support. Its dedicated UK hub (https://www.visahq.com/united-kingdom/) compiles the latest eligibility criteria, processing times and document checklists, providing a streamlined way to navigate the system as policy parameters change.
The report argues that immigration remains critical to sectors such as health, social care, STEM and advanced manufacturing—areas already facing domestic skills gaps.
For global-mobility and workforce-planning teams the findings reinforce the business case for a balanced, skills-focused migration system rather than blunt caps. Companies reliant on international talent are being advised to engage with the government’s ongoing ‘earned settlement’ consultation and to provide evidence of how labour-market shortages could impede growth or relocation projects if migration falls further.
NIESR concludes that “migration policy cannot be set in a vacuum” and calls for a joined-up strategy that links visa settings, skills funding and industrial policy. Whether that warning gains traction in an election year remains to be seen, but the numbers add economic heft to the debate over the UK’s future migration architecture.
