The U.K. economy could stare down long-term irrelevance without immigration

The U.K. economy is facing significant challenges with high inflation and a slower growth forecast compared to other European nations, according to the latest OECD report. The U.K.'s GDP growth has been downgraded to 0.4% from 0.7%, while the Eurozone is expected to grow at 0.7% in 2024. The U.K. is also dealing with higher inflation rates and economic inactivity, exacerbated by a lack of migration to offset labor market tightness.

Jens Eisenschmidt of Morgan Stanley described the U.K.'s economic situation as "Europe, but everything a little worse," highlighting the U.K.'s vulnerability to capital flight and a more pressing need for household financial discipline. Despite challenges, the U.K. remains attractive to migrants due to its language and educational institutions, which could play a crucial role in addressing labor shortages in the face of an aging population and the broader European trend of dependency on immigration for economic stability.