Impact of Decreased Migration on the UK Economy
The drop in net migration to the UK has sent “shock waves” across all sectors, according to the country’s leading human resources organization.
Statistics on Migration Trends
Data from the Office for National Statistics (ONS) reveals that last year, 34,000 more individuals entered the UK than departed. This was before free movement from the EU was abolished. The total was 88 percent lower than the previous year, with net migration at 271,000.
Last year, 268,000 people arrived (down from 592,000 in 2019), while 234,000 left to live abroad (down from 300,000 in 2019).
Factors Contributing to Migration Decline
There was no indication of an exodus from the UK last year. However, worldwide travel restrictions caused by the epidemic hindered people’s mobility, according to Jay Lindop, Director of the Centre for International Migration. She stated that migration in 2020 “fell to the lowest level seen for many years” according to all data sources.
Implications for Inflation and Labor Market
Inflationary pressures may be influenced by migration, said Gerwyn Davies, Senior Labour Market Adviser at the CIPD. He noted, “Substantial growth in the supply of labor, due mainly to increased immigration from the EU, has helped meet strong labor demand over the past decade and more.”
However, he also pointed out the abrupt halt in the supply of EU workers, causing shock waves for employers across all sectors. Particularly affected are hard-to-fill vacancies in low-paying sectors where EU citizens have been disproportionately employed.
Moreover, the dramatic reduction in the inflow of EU workers raises concerns for the Bank of England. This decline may contribute to mounting recruitment difficulties. This coupled with the current surge in price inflation, may be potentially leading to a pay-price spiral.
Source: relocatemagazine.com
