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Reaching net zero migration would squeeze public finances, warns think tank
Net zero migration to the UK could shrink the economy and result in taxes rising to plug a funding shortfall, an influential economic think tank has warned.
The National Institute of Economic and Social Research (Niesr) said such a scenario would “put pressure on the public finances” in its latest economic outlook report.
Net migration figures show the difference between the number of people moving long-term to the country and the number of people leaving.
It would be net zero if the number of people leaving was equal to those arriving.
The latest official figures showed that net migration dropped to 204,000 in the year to June, down 69% year-on-year, and raising the possibility of Britain reaching net zero before the end of the decade, according to some forecasters.
Niesr, a research institute which is independent of party-political interests, said net zero migration would slow down employment growth and lead to a smaller proportion of working-age people, therefore resulting in lower tax revenues.
This would leave the government needing to raise taxes to plug a growing funding gap in the long tun.
Reduced tax revenues could also be met through higher borrowing, which would increase the budget deficit by around 0.8% of gross domestic product (GDP), equivalent to around £37 billion in today’s prices, by 2040, according to the analysis.
But if net migration stayed positive, a larger working-age population would broaden the tax base and help stabilise the debt to GDP ratio, Niesr said.
Stephen Millard, Niesr’s deputy director for macroeconomics, said: “Our analysis clearly shows that net zero migration would put pressure on the public finances and worsen the public debt outlook.
“Unlike Japan, the United Kingdom lacks the institutional and financial conditions to support a substantially higher debt ratio.
“We therefore recommend the Government makes a concerted effort to get public debt down, so it has room to respond to a sharp fall in migration or any other negative shock happening to the UK economy.”
Elsewhere in the latest report, Niesr lowered its outlook for UK economic growth in 2025.
It now expects GDP to be 1.4% for the year, down from the 1.5% it forecast in November.
The think tank predicts that the economy will slow to 1.3% in 2027 and 1.1% in 2028 as taxes rise and government spending growth falls.
It is also forecasting the rate of unemployment to rise to a peak of 5.5% in the second half of 2026, before gradually declining.
Meanwhile, Niesr said it was forecasting two cuts to interest rates this year, bringing them down to 3.25% by the end of 2026 as inflation falls.
Co-op chair Debbie White said: “We thank Shirine for her leadership and for the significant contribution she has made to our Co-op, to our communities and to the co-operative movement during her tenure. The Board is grateful for her commitment and leadership, particularly during a challenging few years, and we wish her every success in the future.”
Air travel is all set to become highly expensive as the airlines are indicating at doubling the air ticket prices following a whopping increase in jet fuel rate.
The jet fuel price has rocketed to Rs417 from Rs388 per litre in Pakistan and the airlines have started to increase the airfares through enhancing fuel surcharge rates.
The airlines maintained the basic fare but added the fuel price surge into the fuel surcharge.
The one-way fare from Karachi to Islamabad and Lahore has shot up to Rs40,000 while air travel on chance seats for Islamabad and Lahore has soared by 150 percent.
Accordingly, the Pakistan International Airlines (PIA) has boosted the airfares by 10 to 100 dollars.
Domestic flights will now carry additional $10 fuel surcharge which on Canada routes extra $100 will be received as fuel charge.
Passengers on UK-bound flights to pay 75 dollars additional surcharge while 50 dollars will be received on Middle East routes.
Private airlines have gone a step ahead as they enforced charging additional 15 dollars to 150 dollars on different routes.
The airlines were under pressure after closure of many air routes with the airlines administrations are saying that extraordinary rise in airfares has become inevitable.
Earlier on Wednesday, Pakistan fuel NOTAM forced foreign airlines to tanker Jet A-1 fuel from abroad and limit uplift at Karachi and Lahore airports.
The Pakistan Airports Authority issued the order to protect local supplies amid supply disruptions.
Foreign carriers now arrive with enough fuel for their return flights while Pakistani airlines receive full requirements.
This change hit operations on March 25 when one Karachi-to-Doha flight diverted to Muscat.
The Pakistan fuel NOTAM A0147/26 took effect on March 13 and runs through March 31 2026. It targets Jinnah International Airport in Karachi and Allama Iqbal International Airport in Lahore.
Airlines follow the rule and carry maximum fuel on inbound legs. Officials confirm foreign airlines get only the minimum quantity inside Pakistan.
Pakistan fuel NOTAM creates immediate changes on the ground. Foreign airlines offload passenger baggage and cargo to stay within weight limits.
The extra fuel adds weight that reduces payload capacity on every affected flight.
According to a Notice to Airmen (NOTAM) issued by the PAA, the supply of aviation fuel at domestic airports has been significantly curtailed due to regional supply chain disruptions, advising international carriers to maximize their fuel “uplift” at foreign stations and minimize refuelling within Pakistan.
The directive has already begun to impact international flight schedules.
The government-backed bank has been accused of a series of errors, including not paying bereaved families money that was rightfully theirs.
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