Immigration to lift population by 5m and boost the economy
Immigration will boost the UK population by nearly 5m people over the next decade, new projections suggest, which could ease some of the fiscal pressures on Rachel Reeves.
Based on current trends, the Office for National Statistics (ONS) suggests the population will hit 72.5m by mid-2032, over seven per cent higher than the estimated 67.6m in 2022.
This will be driven entirely by higher net migration, with the difference between births and deaths projected to be around zero.
“Although births are projected to increase slightly, deaths are projected to rise because of the relatively large number of people born in the post-World War II period reaching older ages,” the ONS said.
The projections for the UK are based on an assumption that long-term net international migration will level off around 340,000 annually from mid-2028 onwards, which is lower than current levels but higher than the ONS’ previous projection.
“These projections are based on current and past trends, and aren’t forecasts about what may or may not happen in the future,” James Robards, ONS head of population and household projections noted.
The Resolution Foundation said the projections could provide a boost to the Chancellor if they are incorporated into the Office for Budget Responsibility’s (OBR) forthcoming economic forecasts.
The new projections suggest the working-age population will be around 400,000 larger in 2029-30 than previously thought, which could boost GDP by around £12bn a year, the Foundation said.
“A larger working-age population means a bigger economy, more workers, and higher tax receipts, which should deliver a fiscal boost of around £5bn a year by the end of the decade,” Adam Corlett, principal economist at the Resolution Foundation, said.
“If the OBR uses these population projections, this will be welcome news for the Chancellor given the wider economic pressures she is facing,” he added.
Robards said that the figures also highlighted the UK’s “increasingly ageing population,” with the number of people aged over 85 set to double to 3.3m by 2047.
“This is in part because of the ageing of the baby boom generation, as well as general increases in life expectancy,” he said.