New EU migrants keeping UK economy healthy

Apr 24 2006 by Nic Paton Print This Article

The influx of economic migrants from Eastern Europe is helping to keep Britain's economy "surprisingly robust", according to a survey by Ernst & Young.

The Ernst & Young ITEM Club, which forecasts on economic issues, has argued that, on the eve of the second anniversary of the accession of the ten latest European Union member states, the UK is "on the crest of a new immigration wave".

Professor Peter Spencer, chief economic advisor to the club, said: "The steady flow from the most recent accession countries to the UK has proved remarkably positive for the economy, keeping interest rates a half a per cent lower than they would otherwise have been.

"From Poland to Slovenia these individuals have plugged gaps in a variety of industries, from agriculture to hospitality and catering with nearly 300,000 immigrants taking new jobs in the UK in the last three years," he added.

Unlike previous occasions that have been confined to major urban centres, this influx has benefited many regions across the UK from East Anglia to Edinburgh, he continued.

As a direct result the UK workforce had become younger, more flexible and economical, easing the pensions' burden and keeping interest rates lower than many commentators could have predicted, Spencer argued.

This unexpected consequence of the UK being one of only three EU countries to immediately sign up to freedom of movement of labour in 2004 was now helping to drive economic growth.

GDP was now expected to grow to 2.6 per cent in 2007 and 3 per cent in 2008, even if interest rates stayed at 4.5 per cent, which ITEM predicted they could do at least until the end of 2006.