The impact of Brexit, falling net migration and an ageing population are set to cause a UK workforce crisis by 2025, according to a study from consulting firm Mercer.

The study showed that the UK’s available workforce is projected to increase by 820,000 (2.4%) in 2025, a fall from the 9% figure in the 10 years to 2015.

Mercer added that. for the first time in half a century, the overall population will be increasing at a faster rate than the workforce, creating long term structural challenges for the economy.

Soaring demand for health and social care sector will also leave 110,000 additional workers available to drive growth across the rest of the UK economy by 2025. This contrasts with figures for the ten years to 2015, which saw an additional 2 million workers for other sectors.

According to Mercer, there will also be a significant shift in age demographics across the workforce. Projections suggest that over the next eight years there will be 300,000 fewer workers under the age of 30 and 1 million more over 50 in the UK as a result of falling net migration and ageing baby-boomers.

“This is likely to have a particular impact on London, whose economy is heavily dependent on young and migrant labour,” the study stated. Mercer forecasts that London’s resident under 30 worker population will fall by 25%, whilst over 50s will increase by 25%.

“There are going to be big winners and losers in the battle for workers,” Gary Simmons, Partner at Mercer, said. “If businesses don’t take action now they will face significant costs and left in a poor position to take advantage of the productivity enhancements promised by rapid development of robotics, digital and machine learning. Companies basing their recruitment strategy on a steady stream of young school leavers and graduates are in for a shock. With the under 30s group set to shrink considerably companies need to look beyond their usual sources for new skills and talent.”