Cutting net migration to zero would deliver a short-term boost to living standards but ultimately prove “fiscally unsustainable”, leaving the UK economy smaller, public finances weaker and the deficit permanently higher, according to new analysis.
The warning comes from the National Institute of Economic and Social Research (NIESR), which said a zero net migration policy would shrink the economy by 3.6 per cent by 2040 and reduce the workforce by around 2.5 million people compared with current forecasts. The result, it argues, would be a £37bn deterioration in the public finances unless offset by higher taxes or cuts to public spending.
The findings land amid fresh evidence that net migration has already fallen sharply. Preliminary estimates suggest net migration dropped to around 200,000 in 2025, the lowest level since 2012, excluding the pandemic period, following tighter visa rules for students and workers introduced by the previous Conservative government and further restrictions on overseas care workers under Labour.
That fall has fuelled speculation among population experts that net migration could approach zero in the coming years. This would mark a dramatic reversal after net migration surged to more than 900,000 in 2023, the highest level on record, with 2022 and 2024 also seeing historically high inflows.
NIESR said that in a scenario where net migration falls to zero, incomes per person would rise by around 2 per cent over the long term, as fewer workers would mean greater access to capital and equipment, boosting individual productivity. However, those gains would not be sustainable without fiscal intervention.
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