EU migrants to 'boost' UK economy

Economic growth is set to increase comfortably, says the think-tank

A greater-than-expected number of migrants from new EU member states will cause the UK economy to grow further, a think-tank says.

The Centre for Economics and Business Research has upped its economic growth forecast to 2.8%, "comfortably above" the chancellor's expectation.

Migrant numbers from accession states beat CEBR forecasts three times over.

The finding echoes an Ernst & Young Item Club report saying EU migrants could speed up UK economic growth.

Public finances

The Centre for Economics and Business Research findings are found in its latest quarterly business forecast.

"Our assumption was that about 200,000 migrants workers would come in to the UK from accession countries - ten times higher than the government," said Douglas McWilliams, CEBR chief executive.

In fact 600,000 came over and the "flow has not stopped yet", he said.

One by-product of the higher growth assumption is that the expectation that public finances would deteriorate is "likely to be less severe".

Extra growth eases the pressure on public finances, said the organisation.

Earlier this month, Ernst & Young Item Club, which uses Treasury data in its research, said growth potential in the UK was 0.5% higher than government estimates and that growth could occur without inflation.

A rise in older-age workers, as well as those from accession countries, had expanded the labour market, it said.