By allowing labor shortages to be addressed in the labor market, immigration can help dampen inflation in the UK, says Gita Gopinath, deputy managing director of the International Monetary Fund.
"In today's times, with inflation so high, having workers who can fill in staff shortages in the sectors where they exist can help bring down inflation," says Geeta Gopinath in an interview republished on the BBC's website.
But I think there is benefit in bringing foreign workers into the UK, he insists.
Inflation in the UK reaches 8,7% and is the highest among the Group of 7 (G7) countries. Food inflation is even higher, reaching 20%.
British Prime Minister Rishi Sunak has said that the numbers of legal immigration are "excessively high".
The United Kingdom recorded a record immigration of 2022 people in 606.000. The figure puts pressure on the Conservative government, which has promised to reduce immigration flows and "take control of the border" after Brexit.
The United Kingdom's exit from the European Union has contributed to increasing pressures on the British labor market, which was already hit by the pandemic.
Economists estimate that there are many hundreds of thousands fewer European workers in the UK than there were before Brexit.
The decline in European workers has caused shortages in logistics, agriculture, tourism, among others, and businessmen are calling for a relaxation of the visa process.
The British labor market was also affected by the pandemic, as there are hundreds of thousands of long covid patients who are unable to work, while at the same time the post-pandemic recovery caused strong demand for businesses and therefore a great need for labor.
According to Gita Gopinath, the International Monetary Fund expects Brexit to reduce the UK economy's growth potential by 2,5% to 4%, matching the Bank of England's estimates of a 3% negative impact on the country's productivity .
The IMF official notes that it is difficult to isolate the effect of Brexit itself, because of the pandemic and many other shocks, such as the energy crisis and the increase in the cost of living due to the war in Ukraine.
Source: RES-EAP