Net migration dropping to zero would shrink the UK economy by 3.6% by 2040, according to analysis from the National Institute of Economic and Social Research. This contraction reflects diminished employment growth and a smaller workforce across the nation. The institution examined this scenario after observing both declining birth rates domestically and a substantial reduction in net migration during the previous year.
Under this zero-migration model, the UK population would stabilize around 70 million by 2030. Currently at 69.3 million, this represents a fundamental shift in population dynamics. The analysis considers what happens if current trends persist throughout the remainder of the decade, creating a static demographic baseline.
Initially, certain economic indicators would improve. Real wages and disposable income would rise as 2% per capita GDP growth occurs by 2040, driven by firms adopting more machinery and enhancing productivity. However, these short-term gains mask longer-term structural problems emerging from population stagnation and aging demographics.
The critical vulnerability lies in government finances. A smaller, aging population generates fewer tax revenues while requiring sustained public spending, widening the gap between income and expenditure. This fiscal imbalance would force the government to borrow approximately £37 billion annually, representing 0.8% of GDP. A continuously aging population without immigration creates an expanding fiscal deficit over two decades. Unless fertility rates increase significantly, the situation becomes unsustainable without substantial tax increases, which could themselves suppress economic growth.
Recent migration patterns prompted this research. Net migration fell sharply from 649,000 to 204,000 in the year ending June 2025, following Conservative government restrictions on work visas. Labour government policies targeting foreign recruitment in health and social care sectors may reduce migration further. Notably, births and deaths in the UK have roughly balanced since the decade’s start, making migration the sole driver of population change.
