London, Dec 18: Over 100,000 young Britons may have been pushed into unemployment by the new wave of Eastern European immigrants. According to an economic analysis undertaken by the Ernst and Young Item Club, the recent influx may have boosted the performance of the British economy, but has also increased domestic workforce unemployment and reduced pay increases for all.
Since 1997, 1.5 million foreign workers have entered the British workplace, with many of these arriving from Eastern Europe in the past three years since the European Union expansion. This new group typically earns 40 per cent less than British workers.
Since 2004, the number of unemployed British 18 to 24 year olds has increased by 100,000, according to the study, which was reported by The Telegraph.
"There is some evidence that the growth of immigrant employment seen in the last few years may have come at the expense of the domestic workforce," the report concludes.
"Given the age and skill profile of many of the new immigrants, it is possible that 'native' youngsters may have been losing out in the battle for entry-level jobs," it added.
The report, however, reveals that a typical British family has saved thousands of pounds a year in mortgage repayments as interest rates are calculated to be up to 1.5 percentage points lower than they would have been without immigration.
New immigrants have pushed down inflation, staving off Bank of England increases in interest rates. The impact of immigration on the economy is now a key political battleground with Gordon Brown controversially pledging to create "British jobs for British workers".
The Conservatives, on the other hand, have said they will cap immigration at a level recommended by a council of economic experts.
"Immigration has been unequivocally good economically in terms of the benefits for lower inflation and interest rates. However, the fact is that wage increases have been held down," the paper quoted Peter Spencer, the chief economic adviser of Ernst and Young Item Club, as saying.
According to Ernst&Young's calculations, if immigration continues at the same rate as the past two years -190,000 net immigrations a year - the economy will grow by about three per cent annually.
Without immigration this would fall to 2.2 per cent, knocking 10 billion pounds off the growth in the economy.
Meanwhile, the British Government will today announce plans to clamp down on visas for visitors. The duration for tourist visas is to be cut from six to three months and families who sponsor visits by relatives may have to pay a "bond".