UK migration drops to 171,000 - almost half 2024's figure

UK net migration fell to 171,000 last year — the lowest since 2012 excluding the Covid period — driven by fewer arrivals from outside the EU and cuts to work- and student-related routes. Asylum claims were 93,525 in the year to March 2026 (down 12% year-on-year) while people housed in asylum hotels fell to 20,885 in March 2026. Policy changes since 2024 — including raising the skilled-worker salary threshold (previously £26,200 to £38,700 and now planned to rise to £41,700), tighter family and student rules, and a skills-based migration system — are cited as key drivers. Market-relevant implications include a potentially tighter UK labour market that could support wages and put upside pressure on inflation, creating a mixed signal for GBP vs USD: potential structural support from tighter labour supply but near-term growth risks from reduced labour inflows and elevated asylum-related costs.