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Last Updated: Sunday, 23 April 2006, 14:16 GMT 15:16 UK
Migrant workers 'boost UK growth'
Construction workers at the Wembley Stadium site
Migrant workers are involved in major UK building projects
Migrant workers from Eastern Europe are providing a positive boost to Britain's economy, according to a report.

New immigration has helped to keep inflation under control, boost output and raise tax revenue, research by Ernst & Young has suggested.

Workers from Poland and Slovenia are among those "plugging gaps in a variety of industries", the report said.

The UK is one of only three EU states to grant full labour rights to citizens from the 10 recent accession countries.

The Ernst & Young Item Club Spring Forecast, which uses the Treasury's own forecasting model for its calculations, said immigration had helped keep UK interest rates half a percent lower than they would have otherwise been.

Crest of wave

Some 300,000 immigrants have taken jobs in areas ranging from agriculture to hospitality in the last three years, the report said.

"We are on the crest of a new immigration wave," said Professor Peter Spencer, the report's author. "The steady flow from most recent accession countries to the UK has proved remarkably positive for the economy.

"As a direct result, the UK workforce has become younger, more flexible and economical, easing the pensions burden and keeping interest rates lower than many commentators would have predicted."

The report said that contrary to previous waves of immigration into Britain, which had largely been confined to major urban areas, the current influx of migrants was spread out "from East Anglia to Edinburgh".

The Item Club report said it expected Britain's GDP growth to pick up to 2.6% next year and by 3% in 2008, even if interest rates remain at their current 4.5%.

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