At the start of 2026, projections suggested that net migration to the United Kingdom could soon approach zero, a significant shift from recent years when immigration reached record levels. Data from the Office for National Statistics (ONS) shows that annual immigration increased from approximately 800,000 before the COVID-19 pandemic to over 1.4 million by 2023. Net migration, defined as the difference between immigration and emigration, peaked at nearly 900,000 in 2022 but is estimated to have declined to below 200,000 by the end of 2025.

Beyond the headline figures, the profile of migrants has seen notable changes. During the 2010s, about half of all immigrants were from European Union countries. Currently, approximately three-quarters of migrants come from outside the EU. Among this group, students and their dependants constitute nearly half (around 290,000), workers and their families make up a quarter (about 150,000), and asylum seekers represent roughly 15 percent (approximately 90,000).

The latest data indicate net migration may fall further in 2026, potentially dipping below 150,000. Projections by the ONS anticipate net migration stabilizing at around 230,000 annually from 2027 onward. Although these figures challenge earlier predictions of near-zero net migration, they remain lower than previous estimates that informed the Office for Budget Responsibility’s (OBR) spring forecasts. This divergence could influence fiscal planning ahead of the forthcoming Budget.

The relationship between migration and public finances is complex, influenced by the number of arrivals as well as their economic participation and duration of stay. Government decisions on spending and resource allocation in response to population changes also play a role. A downward revision of net migration assumptions in the OBR’s forecasts might increase borrowing by an estimated £1 billion to £4 billion by 2029-30, the fiscal year when compliance with government borrowing rules is closely examined. These changes would primarily result from reduced tax revenues associated with lower immigration.

While such budgetary impacts may appear manageable, recent governments have limited fiscal flexibility, meaning routine forecast adjustments can materially affect tax and spending decisions. This situation underscores the importance of the OBR’s approach to migration forecasting.

Currently, the OBR’s medium-term outlook relies on the ONS’s long-term population projections, which are designed to capture broad demographic trends rather than the effects of specific government migration policies. This reliance creates challenges, particularly as the government has implemented several significant policy shifts since the pandemic. These include the introduction of a visa route for Hong Kong residents in 2020, restrictions in 2023 on international students switching visa categories and bringing dependants, and tightened rules on skilled-worker visas from 2025 onward. Each of these could have substantial impacts on the economy’s labor supply, potentially exceeding the effects of high-profile domestic policies such as tax revisions and childcare support announced since 2023.

In response, the OBR has recently adopted more nuanced techniques to adjust migration projections in the short term. However, experts argue that the fiscal watchdog should further reduce its dependence on the ONS’s long-run assumptions. They recommend the OBR explicitly disclose its assessment of how migration policies influence borrowing forecasts—a transparency currently lacking as these judgments are embedded within broader economic projections.

Although migration remains inherently unpredictable, enhancing the clarity and detail of the OBR’s migration-related fiscal analysis would improve understanding of government policy impacts. Such transparency would also provide more robust grounds for public and parliamentary scrutiny as debates around migration continue to shape UK economic and social policy discussions.