UK immigration cap will affect growth in UK economy

United Kindgdom, 18th June: According to a latest report by the Office for Budget Responsibility(OBR), placing a cap on UK immigration will have a direct effect on the development of UK economy.

Moreover, the decrease in UK immigration rates along with aging population of the UK will become a cause of severe economic concern by the year 2014. 

Immigration rates in the UK had touched a new level at 233,000 in the year 2007. However, there has been a significant fall in the UK immigration figures since then. And, if the estimates are to be believed, the UK immigration level will touch a lowest level at 50,000 in the coming few years. 

The report findings say that changing scenario of demographics will not only restrict UK’s economic growth but will also weaken UK’s national currency. 

Further, poor job prospects in the UK will also compel prospective immigrants to the UK to look for other options since devalued pound will diminish power of UK immigrants to send money to their family in their native towns. 

The report findings are based on the data provided from the ONS(Office for National Statistics) which reiterates that growing figures of aging baby boomers will not only eat into development of UK economy but will also mean additional pension costs for the government. 

Increased number of women will continue in the labor market of the UK following an increase in the qualifying age for state pension to 65 years. Meanwhile, there will be an overall decrease in the activity in the labor market of the UK of nearly 0.15 percent annually, the OBR report maintains.

There will a severe shortage in the available workforce in the labor market of the country due to the total number of person aged 65 and above growing to nearly 13 million. 

Additional public finances to be borne by the UK government will include costs of extending occupational pensions and state pension to public sector workers in the UK. 

In May 2010, the OBR was formed in order to facilitate the independent assessment of economy for every Pre-Budget and Budget Report as well as forecasting public finances.