Demographic Shift in UK Will Hurt its Economy!

According to UK’s Office for budget Responsibility, the nation’s economic growth may hamper by the demographic shift in the nation. The predictions say that the nation’s economy would suffer due to the immigration cap on non-European nationals, as well as an ageing population of the nation.

The Budget Responsibility department says that the long-term consequences of an immigration limit and the number of ageing people will prove unbeneficial for the economic growth of the nation. The department has alarmed that demographic changes in the UK will have intense effect on the growth of the economy.

United Kingdom’s net immigration was at its best at 233,000 in the year 2007. But, after that the immigration level declined drastically and it is expected to go down to 50,000 within the next few years. The department, which took the figures from the Office for National Statistics, also presumes that the slowdown in economy and weak pound will have an effect on the number of migrants entering the nation. According to the report, the larger number of baby-boomers will hurt the growth in economy and increase the national budget deficit. As a matter of fact, as many women are likely to stay in the labor market, reason being the age for qualifying for the state pension is now 65, the overall effect of an ageing society will result in declination of labor market activity of about 0.15 percent per year.

Extra expenditure of providing state, as well as occupational pensions to retired public servants adds extra burden to the nation’s finances. Moreover, people of over 65-year-old likely to make up almost thirteen million which will have an effect on the labor market.

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