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In the News

UK Economy - Surge in Net Migration into the UK

Geoff Riley

23rd November 2023

New data on long-term migration shows that immigration in 2023 was 1.2m people with the vast majority coming from outside the European Union. Many are students and people arriving to work in the UK in health and social care. Emigration in 2023 was 508,000 people. Net migration (difference between people arriving and people leaving) was 672,000 in 2023 and much higher in 2022. What are some of the likely economic effects of this very high level of net inward migration?

UK Economy - Surge in Net Migration into the UK
  1. UK Net Migration Trends (2012-2023):
    • The number of people immigrating to the UK from non-EU countries has experienced a significant surge, particularly in the last two years, reaching historically high levels.
    • Immigration from European Union countries has declined since 2016, following the UK's exit from the EU.
    • Total long-term immigration, including people intending to stay for at least 12 months, exhibited a sharp increase in 2021 and 2022, surpassing 1.2 million.
  2. Net Migration Dynamics:
    • Net migration for British nationals has been mostly negative in recent years, with more Brits leaving the UK than returning, although there has been a positive trend in the last year or two.
    • Net migration from non-EU countries has significantly increased, while net migration from the European Union has been consistently negative, influenced by Brexit and the pandemic.
    • The overall long-term net migration for the UK showed a substantial rise, reaching 672,000 in 2023, reflecting a substantial increase from the 2016 peak of around 300,000.
  3. Economic Impact and Work Visas:
    • Work visas have seen a substantial surge, with a 63% increase, reaching 538,000, as the UK government implements a points-based immigration system to address labor shortages and encourage skilled migration.
    • Study visas accounted for 67,000 individuals, including both sponsored and short-term students, contributing to the overall migration numbers.
    • The skills composition of migrants is a crucial factor, with efforts to shift towards higher-skilled individuals, aiming to positively impact the labor market and address skill shortages in key sectors.
  4. Economic Effects of Migration:
    • Increased net inward migration can impact the labor market by stimulating growth, enhancing productivity, and diversifying the skills available in the workforce.
    • Migrants often contribute to innovation, entrepreneurship, and economic dynamism, leading to growth in both short and long-run aggregate supply and demand.
    • However, a growing population due to migration may pose challenges, putting pressure on infrastructure, such as transportation, housing, education, and healthcare.
  5. Future Considerations and Conclusion:
    • Migration data is influenced by complex factors, including humanitarian schemes, geopolitical situations, and government policies, making it a dynamic and challenging issue to forecast.
    • The UK's persistent labor shortages, with nearly a million job vacancies and unemployment at 4.2%, suggest that long-term work visas are likely to remain high.
    • As a significant economic, political, and social issue, monitoring migration trends and understanding the demand and supply side effects is crucial for informed analysis and policy considerations.

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Geoff Riley

Geoff Riley FRSA has been teaching Economics for over thirty years. He has over twenty years experience as Head of Economics at leading schools. He writes extensively and is a contributor and presenter on CPD conferences in the UK and overseas.

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