UK to pass population tipping point in 2026, think tank says

The number of people who die in Britain this year is set to exceed those born in the country, the Resolution Foundation said, in what the think tank described as a permanent shift that will increase the U.K.’s dependency on migration.

Britain will see a shortfall in births in 2026, Resolution Foundation projected as part of its annual economic outlook released on Monday. That gap will increase “by an ever-widening margin, forever closing a chapter in the demographics” of Britain that stretches back to at least the start of the 20th century, the research institution said.

While the number of deaths in the U.K. exceeded births in 2020 at the height of the Covid-19 pandemic and again in 2023, the native population grew slightly in each of the past two years, Resolution Foundation estimated. From 2026 onwards, any population growth “is set to come from international net migration,” the think tank said.

The report shows the stakes of the debate gripping Britain as Prime Minister Keir Starmer seeks to reverse the rise of Nigel Farage’s anti-immigration Reform UK in opinion polls. Starmer and his home secretary, Shabana Mahmood, have pledged to bring down migration from record highs, at the risk of the Labour Party’s broader commitment to end an extended period of economic stagnation.

Opposition to immigration — a key driver of Britain’s vote a decade ago to leave the European Union — has risen further in the wake of a surge in both legal immigration and arrivals of asylum-seekers from across the English Channel. Net migration reached a peak of almost one million a year after the then-Conservative government loosened visa rules to offset the shortfall of European workers and accommodate Ukrainians and Hong Kongers fleeing strife at home.

The U.K.’s projected shortfall in births mirrors trends elsewhere in Europe and across the developed world, fueling support for policies to encourage women to have more children. The projected population accounts for everyone already in the U.K., including families of foreign descent as well as those who have been in the country for generations.

“This may shift the conversation on migration away from arguments over whether the country is already ‘full’ and onto whether we want to address population decline,” said Greg Thwaites, research director for the Resolution Foundation. Thwaites acknowledged the subject was “likely to remain politically charged.”

The U.K. has already seen a dramatic slowdown in population growth, largely due to increased visa hurdles implemented by former Conservative Prime Minister Rishi Sunak in the months before Starmer took office. Net migration dropped back to 204,000 in the year to June 2025, and more recent Home Office figures suggest it should fall further amid Starmer’s efforts to discourage lower-skilled workers and asylum-seekers from pursuing residency.

Farage has pledged to scrap the permanent residency program known as indefinite leave to remain for migrants and carry out mass deportations similar to the Trump administration’s efforts in the U.S. Such hard-line policies have been credited with Reform’s months-long dominance in public opinion polls, although Starmer isn’t required to call an election until 2029.

Migration advocates argue that new arrivals have been vital for staffing public services and business. The prospect of a shrinking home population “should prompt us to ask hard questions about the future of our public services, and the tax revenues needed to fund them, in an aging society,” said Ruth Curtice, Resolution’s chief executive officer.

In theory, as the share of non-working older people grows taxes on the working population will have to rise to fund their costs. Migration can help stabilize the system. Still, an analysis by the Office for Budget Responsibility in 2024 showed that lower-wage migrants are a net cost to the taxpayer, as are those who aren’t employed.

Rising unemployment

The Resolution Foundation’s 2026 outlook also warned of rising unemployment as more firms go out of business due to higher interest rates since 2022, higher energy costs and the increase in minimum wages as well as the effects of AI adoption.

The clear-out of such underperforming companies could help lift the UK’s weak productivity, a measure of output per hour that is the engine of economic growth. There are signs of a “reallocation of labor” to new, better companies from older, less efficient so-called zombie firms, it said.

“Our hunch is that the triple whammy of multiyear increases in interest rates, energy prices and the minimum wage is finally beginning to finish off some of the low-productivity ‘zombie’ firms that managed to stay afloat in the 2010s” the group said. It warned, however, that the closures and job losses will be “hugely difficult for many of those directly affected.”

A separate quarterly survey by the British Chambers of Commerce found that confidence has continued to weaken following the November budget to its lowest level in three years, with retail and hospitality the worse affected. The level of tax remains the biggest concern for business, following the $35 billion payroll levy that came into effect last year and recent increases in business rates.

In what may be a concern for the Bank of England in its efforts to tackle inflation, 52% of firms said they plan to increase prices in the next three months – up from 44% in the preceding quarterly survey.