Britain is currently experiencing a new wave of ‘brain drain,’ which poses additional challenges in light of Rachel Reeves’ recent Budget missteps.

On Thursday, official data revealed a significant outflow of young Britons, while asylum seekers now constitute nearly half of the net migration figures.

Experts caution that as Ms. Reeves grapples with efforts to stimulate growth, these pronounced demographic shifts could impose further pressure on public finances and weaken the economy.

They warn that taxpayers may bear an ‘unacceptable burden’ to support incoming migrants, particularly as this week’s Budget may further discourage young residents from staying.

According to the Office for National Statistics, net migration — the balance of long-term arrivals and departures — dropped to 204,000 in the year leading up to June, a downturn attributed to stringent Tory policies.

However, the influx of asylum seekers into Britain has reached unprecedented levels, significantly increasing their proportion within the overall migration figures.

Meanwhile, 174,000 16-to 34-year-olds fled Labour’s high-tax state in the year to March, accounting for just over two-thirds of Britons leaving the country, the ONS said.

Following measures unveiled by Ms Reeves on Wednesday, alongside her manifesto-busting £30billion tax hikes, young people face a battle to find work, with a rise in the minimum wage meaning businesses are less likely to take a chance on them.

Britain is facing a new ‘brain drain’ that threatens to add to the pain of Rachel Reeves’ disastrous Budget. Pictured: British Chancellor of the Exchequer Rachel Reeves poses with the red budget box outside 11 Downing Street in London, Britain, November 26, 2025

Official figures on Thursday revealed an exodus of young Britons while asylum seekers now make up nearly half of net migration. Pictured: Migrants onboard an inflatable boat help others climb aboard during an attempt to cross the English Channel, off the beach of Gravelines, northern France, 27 September 2025

Those who do find employment will pay income tax earlier and at higher rates due to the freezing of the personal allowance and tax bands, while student loan repayment thresholds were also paused, meaning graduates face earlier deductions from their pay packet as they start work.

In a further significant development which will affect the economy, the number of skilled foreign workers coming here dropped to 57,000 in the 12 months to September from 75,000 the previous year.

The new data showed asylum seekers – including small boat migrants – made up 44 per cent of the net number of migrants overall.

Separately, official statistics published for the first time on Thursday showed migrants who go on to win refugee status are far more likely to be unemployed.

Even after living here for eight years, 48 per cent of working-age refugees are in work, far below the average employment rate of 74 per cent, and continue to rely on welfare hand-outs.

Shadow Home Secretary Chris Philp said: ‘It is a day of shame for the Government. Nearly half of net migration is asylum seekers, many of whom arrived illegally. 

‘Around half of asylum seekers do not end up getting a job, meaning hard-pressed taxpayers are being fleeced to fund a benefits bonanza for illegal immigrants.

‘This puts an intolerable, multi-billion pound burden on the nation’s finances.’

Mr Philp added: ‘This “brain drain” will only get worse after Labour’s punishing Budget this week.’ 

Dr Ben Brindle, of Oxford University’s Migration Observatory, said: ‘It does seem that the composition of migration has become less favourable from an economic perspective, with fewer people getting skilled worker visas and a higher share of refugees, who often need a lot of support.’

Allowing for Britons who returned to live here, net emigration of British nationals was 112,000 in the year, most of whom were aged 16-34. 

By comparison, only 1,000 Britons aged over 65 emigrated while 12,000 returned to live here.

A spokesman for the Migration Observatory added: ‘The only major migration category where net migration did not decrease was asylum.

‘Long-term immigration of asylum seekers was 96,000 in the year ending June 2025, making up 11 per cent of all immigration – double the 5 per cent share in 2019.

Following measures unveiled by Ms Reeves on Wednesday, alongside her manifesto-busting £30billion tax hikes, young people face a battle to find work, with a rise in the minimum wage meaning businesses are less likely to take a chance on them

‘Relatively few asylum migrants emigrate, so net migration of people seeking asylum was 90,000 in the same period, equivalent 44 per cent of total net migration.’

It was double the pre-Brexit figure of 22 per cent in 2019. The figures could, however, be even more stark than depicted in the Migration Observatory’s analysis. 

Separate Home Office data published on Thursday – covering the year to September, a more recent period than the ONS figures – showed there were a record 110,051 asylum claims. 

This could make the proportion of net migration made up by asylum seekers even more pronounced in future figures.

There was a fall in long-term immigration levels to 898,000 in the year to June – the first time it has dipped below a million since 2021. 

The largest group was migrants from outside the EU, on 670,000.

The year saw 85,000 EU nationals come to live here long-term, down from a peak of 521,000 in 2016. It also saw 155,000 EU nationals emigrate from Britain. 

Total emigration – including Britons – was 693,000.

The number of foreign nationals granted settled status is running at the highest level in more than a decade. 

There were 158,137 granted ‘indefinite leave to remain’, the highest figure since 2011. There were 240,613 grants of British citizenship.

Home Secretary Shabana Mahmood said: ‘Net migration is at its lowest level in half a decade and has fallen by more than two-thirds under this Government.

‘But we are going further because the pace and scale of migration has placed immense pressure on local communities. 

‘Last week, I announced reforms to ensure that those who come here must contribute and put in more than they take out.’