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The UK’s last six prime ministers have all promised to reduce migration – and now it is happening. The most recent figures show that net migration (the number of people coming to the UK minus the number leaving) was at 171,000 in 2025. This is the lowest point since 2012.

Falling migration may be a political win in a world where both the right and left see it as a top national concern and promise tough measures to “secure borders”. But it also has implications for the economy, including worsening existing labour shortages and constraining future growth.

Projections from the Office for Budget Responsibility associate lower net migration with declining GDP. This is because migrants tend to be of working age and thus contribute to productivity and taxation.

Countries across Europe, including the UK, are dealing with acute labour and skills shortages. This is largely driven by three interacting forces: ageing populations, a mismatch between skills and demand, and poor working conditions. On top of this, the UK has to face the effects of Brexit, which caused a significant shortfall of EU workers.

Both the EU and UK face labour shortages in healthcare, long-term care, hospitality, and skilled trades such as bricklaying, welding and tiling. All are sectors that tend to employ high numbers of migrants.

The UK’s health and...

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