Falling UK net migration and what it means for labour markets

The Office for National Statistics (ONS) recently published the UK’s net migration figures for the second half of 2025. The data shows that the downward trend from the extreme post-Covid levels continues. Net migration in 2025 fell to 171,000 (including 813,000 people who migrated to the UK and 642,000 who left), down from an all-time high of 944,000 in the 12 months to March 2023, as shown in Exhibit 1. Excluding the Covid days, when migration was severely restricted, this is the lowest net migration number since 2012. We think that not only is the headline number important but also looking under the hood reveals some crucial shifts in trends. 

The composition of migration has shifted quite dramatically since net migration was last at the current levels (excluding Covid). In 2012, net migration of 195,000 was driven largely by inflows from the European Union (EU) of 206,000. At the same time,60,000 non-EU nationals arrived, while 72,000 British national left the country. 

In 2025, the composition of net migration to the UK has completely changed. Whereas the UK previously saw net inflows from EU nationals, last year, a net 42,000 EU citizens left the UK, while non-EU nationals’ migration figures reached 350,000. Britons have also accelerated their emigration trends, with 136,000 leaving the country last year. A lot of these changes can be explained by Brexit and the post-Brexit migration policy. The largest share of EU migrants has historically come from Romania and Poland, with numbers showing that a majority of these citizens find employment in low-skilled jobs. As net migration has fallen across the board from the EU cohort, a gap in the market has opened for low-skilled labour. 

Non-EU migrants, on the other hand, tend to find employment in higher-skilled jobs than EU nationals, although they are spread more evenly across different roles, and arrive in greater numbers for study-related reasons. In fact, this is the biggest reason non-EU nationals came to the UK last year. Although the ONS does not publish the motivation for EU nationals migrating to the UK as it does for non-EU citizens, we strongly suspect that the share of study-related migration is lower in that cohort. In short, the composition of migration last year compared to the last time (excluding Covid) that net migration numbers were at these levels, is more heavily skewed towards higher-skilled workers and students than lower-skilled jobs, and the trends are not changing.

The shift in composition of UK net migration has implications for the labour market too. As in the US, the decline in net migration from the Covid peak is contributing to a stickier unemployment rate despite sluggish job creation. The PAYE survey by ONS (a non-farm payroll number of sorts, but even more volatile) shows that the UK economy has been losing jobs over the last few quarters at an alarming rate, with the largest fall in the history of this data series (excluding Covid) at 100,000 jobs lost in the April 2026 reading. While the unemployment rate has increased and now sits somewhat uncomfortably at 5.0%, the number would be markedly higher if immigration numbers had not fallen as they have.

Lastly, a couple of quick comments on the political implications of migration trends. Immigration remains top of the agenda for the population and politicians. In a recent Ipsos poll, immigration ranked as the biggest issue facing the British public, ahead of the economy and inflation, with 41% of respondents mentioning it as an area of public concern. 

The politics may change if current trends persist. On the one hand, asylum seekers represented a net inflow of 82,000 last year. Although it has fallen from the peak, it is still twice its pre-Covid level, which will keep immigration in the spotlight in the short term. On the other hand, it is not out of the question that we see negative net migration numbers in the coming quarters. By the time there is another general election in the UK, net migration numbers might have been below pre-Covid levels for a protracted period. This might shift the preference of the electorate and therefore the focus of politicians away from migration onto other areas. Maybe the economy and taxes gain more importance. 

One final trend to follow is the net emigration of British citizens, which is currently the highest on record. Although there is no breakdown of motivation for this number, there is at least the theoretical possibility that one of the reasons could be increased taxes. We will need to wait and see what HMRC’s tax intake numbers are, to examine the trends and reach a conclusion. However, it goes without saying that if people are leaving the UK because of high taxes, it underscores a problem with the UK’s competitiveness and will have further economic consequences.