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Net Migration Seen Undershooting OBR Forecast, Raising Tax Dilemma for Reeves

Analysts say visa curbs plus graduate visa expiries threaten revenues.

Overview

  • Experts now expect UK net migration to fall well below the OBR’s November forecast of 262,000, with some projections pointing to zero or even negative by year-end.
  • ONS data show net migration at 204,000 in the year to June 2025, down sharply from the 2023 peak of 944,000.
  • The OBR has previously estimated that a sustained 200,000 drop in net migration could reduce government revenues by about £20 billion by the end of the decade.
  • Drivers cited include fewer work, health and social care visas after rule tightening, a new 15-year route to indefinite leave to remain for some workers, and a wave of graduate visa expiries.
  • Estimates diverge: University of Warwick’s James Bowes sees a potential fall to -62,000, while Oxford’s Madeleine Sumption judges net zero only around a 10% probability and expects a short‑run decline of 100,000–200,000, likely temporary.