Net immigration to settle at 245,000 a year, says OBR
Net immigration ‘will settle at 245,000 a year’: OBR upgrades estimates by 40,000 since November, pointing to big inflows from Ukraine, Hong Kong, student boom and post-Brexit points-based system
Net migration is now expected to ‘settle’ at 245,000 a year after the OBR upgraded the figure by 40,000 since November.
The Treasury watchdog has upped its projections, pointing to large numbers of students as well as arrivals from Ukraine and Hong Kong.
It also highlighted the visas granted under the post-Brexit system, mostly to nationals from outside of the EU.
The figures were revealed in the latest OBR outlook, published alongside the Budget today. Downing Street declined to be drawn on whether the government still held the ambition of reducing net long-term immigration to the tens of thousands.
The OBR has upped its projections for net immigration, pointing to large numbers of students as well as arrivals from Ukraine and Hong Kong
The figures were revealed in the latest OBR outlook, published alongside the Budget today
The OBR report said: ‘Net migration flows settle at 245,000 a year, rather than the 205,000 assumed in our November forecast and 129,000 in our March 2022 forecast.’
The body said the migration estimates were ‘consistent with relatively high recent rates of actual net migration, which the ONS estimates reached over half a million in the year to mid-2022’.
The rise was attributed to ‘the resumption of international travel following the pandemic, especially among foreign students, with student visas reaching a record high of 490,000 in 2022’.
The watchdog also indicated the ‘post-Brexit immigration regime that began in 2021 and issued 800,000 visas in its first year of operation (only 50,000 of which were for EU citizens who did not require a visa under the previous regime).
Another influence was ‘other changes, including 129,000 British National Overseas visas to Hong Kong nationals and 210,000 visas to Ukrainian nationals’.
The OBR said it had increased economic forecasts based on the higher immigration.
‘A larger population, due to increased net migration, adds 0.5 per cent to potential output in 2027,’ the report said.
Britons still face the worst decline in living standards since records began in the 1950s and the highest tax burden since the Second World War.
The Treasury watchdog highlighted the ongoing misery despite its latest forecasts saying the outlook has improved since the Autumn.
The economy also remains on track to shrink by 0.2 per cent this year, although Jeremy Hunt boasted that UK plc will avoid technical recession – defined as two successive negative quarters.
In documents accompanying the Spring Budget, the watchdog said the Chancellor is only on track to meet his debt targets by the narrowest of margins after a big splurge on childcare and freezing fuel duty.
It also potentially caused trouble for the government by estimating that migration will now settle at 245,000 – higher than the 205,000 it predicted in November.
The OBR watchdog highlighted the ongoing misery despite its latest forecasts saying the outlook has improved since the Autumn
The report said real household disposable income (RHDI) per person is expected to fall by a cumulative 5.7 per cent over the financial years 2022-23 and 2023-24.
‘While this is 1.4 percentage points less than forecast in November, it would still be the largest two-year fall since records began in 1956-57,’ the OBR said.
‘The fall in RHDI per person mainly reflects the rise in the price of energy and other tradeable goods of which the UK is a net importer, resulting in inflation being above nominal wage growth.
‘This means that real living standards are still 0.4 per cent lower than their pre-pandemic levels in 2027-28. But they are 0.6 per cent higher than we forecast in November thanks to lower market expectations for medium-term gas prices and the upward revision to potential output.’
The watchdog said the latest forecast ‘continues to see the tax burden (the ratio of National Accounts taxes to GDP) reach a post-war high of 37.7 per cent of GDP at the forecast horizon in 2027-28, including the highest ratio of corporation tax receipts to GDP since the tax was introduced in 1965’.
‘We also still expect the ratio of public spending to GDP to settle at 43.4 per cent, its highest sustained level since the 1970s,’ he said.
The OBR said Mr Hunt had committed money to ‘providing more support with energy bills and business investment in the near term, while boosting labour supply in the medium term’.
‘This lowers inflation this year and, more significantly, sustainably raises employment and output in the medium term.
‘But it leaves debt falling by only the narrowest of margins in five years’ time.’
Inflation is predicted to come down slightly faster than anticipated
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