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

(Bloomberg) — The number of deaths 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 would increase Britain’s reliance on immigration.

Britain will see its birth rate fall in 2026, the Resolution Foundation projected as part of its annual economic outlook released on Monday. That gap “will continue to widen by an ever-widening margin, forever closing a chapter on UK demography” that stretches back at least to the early 20th century, the research institute said.

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At the height of the Covid-19 pandemic in 2020 and again in 2023, the local population has grown slightly in each of the past two years, with UK deaths exceeding births, the Resolution Foundation estimates. After 2026, any population growth “will come from international net migration,” the think tank said.

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

Opposition to immigration – a key driver of Britain’s vote to leave the European Union a decade ago – has been exacerbated by increases in both legal immigration and the influx of asylum seekers across the English Channel. Net migration peaked at nearly a million a year after the then-Conservative government relaxed visa rules to accommodate a shortage of European workers and accommodate Ukrainians and Hong Kongers fleeing conflict at home.

The fall in the UK’s projected birth rate mirrors trends elsewhere in Europe and the developed world, which support policies to encourage women to have more children. The estimated population includes foreign-born families already in the UK as well as those who have lived in the country for generations.

“It can shift the conversation on immigration away from arguments about whether the country is already ‘full’ and whether we want to address population decline,” said Greg Thwaites, director of research at the Resolution Foundation. Thwaites acknowledged that the subject was “likely to remain politically charged”.

Britain has already seen a dramatic slowdown in population growth, largely due to increased visa restrictions imposed by former Conservative prime minister Rishi Sunak in the months before Stammer took office. Net migration fell to 204,000 in June 2025, and recent Home Office figures suggest it could fall further amid Starr’s efforts to discourage low-skilled workers and refugees from pursuing residency.

Farage has vowed to scrap the permanent residency program known as indefinite leave for immigrants and enact mass deportations similar to the Trump administration’s efforts in the US. Such hard-line policies have been attributed to the reform’s months-long dominance in opinion polls, even though Starr is not required to call an election until 2029.

Immigration advocates argue that newcomers are vital employees for public services and businesses. “The prospect of a shrinking household population should prompt us to ask tough questions in an aging society about the future of our public services, and the tax revenue needed to fund them,” said Ruth Curtis, chief executive of Resolution.

In theory, as the share of the non-working elderly increases, taxes on the working population should increase to fund their costs. Migration can help stabilize the system. Still, an analysis by the Office for Budget Responsibility in 2024 showed that low-wage migrants are a net cost to taxpayers, as are those who are not employed.

Rising unemployment

The Resolution Foundation’s 2026 outlook also warns of rising unemployment from 2022 as many firms go out of business due to higher interest rates, higher energy costs and increases in the minimum wage, as well as the impact of AI adoption.

Clearing out such underperforming companies could help lift Britain’s weak productivity, the engine of economic growth, by measuring output per hour. There are signs of a “reallocation of labor” from older, less efficient so-called zombie firms to newer, better companies, it said.

“Our guess is that the triple whammy of multiyear increases in interest rates, energy prices and the minimum wage has finally started to eliminate some of the less productive ‘zombie’ firms that managed to run in 2010,” the group said. However, it warned that the closures and job losses “will be extremely difficult for many directly affected.”

A separate quarterly survey by the British Chambers of Commerce found that confidence was weakening after November’s Budget hit its lowest level in three years, with retail and hospitality sectors hit even harder. The level of taxation remains one of the biggest concerns for business after the £26 billion ($35 billion) payroll levy introduced last year and the recent rise in business rates.

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

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