Drop in immigration, aging population to cause economic concern by 2014
17th June 2010: Cap on immigration may not be the right solution after all. A new report suggests a decline in UK immigration, and an aging population, will be a matter of economic concern by 2014.
Apprehensions have been expressed that the two factors cause a slowdown in growth.
The report, based on information from the Office for National Statistics, also indicates the UK economy is not recovering as fast as expected.
The UK’s wealth will grow by 2.6 per cent in 2011. The figure predicted by the Treasury in March under Labour was between 3 and 3.5 per cent.
The Office for Budget Responsibility is insisting that the changing demographics in the coming years have a deep effect on the UK economy’s capability to grow. The resulting weak pound and low job prospects will discourage migrants from coming to the UK.
The Office for Budget Responsibility came into existence in May 2010 for coming out with independent assessment of the public finances and the economy for each Budget and Pre-Budget Report. It will publish other figures in tandem with George Osborne’s Budget on June 22nd.
Net UK immigration registered its peak in 2007 at 233,000. Since then, there has been a sharp decline. It is expected to reach 50,000 in the next couple of years.
The overall effect of an ageing society "points to a decline in labour market activity of around 0.15% a year," the report said.