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UK net migration set to be about 245,000 a year, OBR says

People, believed to be migrants, disembark a Border Force boat at the Border Force processing centre, in Dover

LONDON (Reuters) - Net migration to Britain is likely to stabilise at about 245,000 people a year, the Office for Budget Responsibility (OBR) said on Wednesday, rising above previous projections and targets, and key to the country's future economic growth.

Concerns about the level of immigration was a major driver behind the 2016 referendum vote to leave the European Union, and the governing Conservative Party had promised to cut net migration to under 100,000 annually until that pledge was dropped before a 2019 election.

According to the OBR projections, net migration was now likely to "settle" at about 245,000 a year, an increase of 40,000 from its November forecast and up substantially from the 129,000 projected in its forecast a year ago.

Businesses have suggested a more relaxed approach to migration would help boost growth, with staff shortages weighing heavily on many firms.

The government has largely resisted those calls, saying companies should better train their staff to boost productivity, but it has eased hiring rules in the hardest-hit sectors, and said on Wednesday they would now make it easier for construction companies to hire overseas workers.

"A larger population, due to increased net migration, adds 0.5 percent to potential output in 2027," the OBR said.

The importance of migration to the economy comes as finance minister Jeremy Hunt unveiled measures such as expanded access to childcare and an overhaul of the welfare system to help get more people into work and alleviate a tight labour market.

But, critics said it contrasted with the government's planned new law to remove all migrants who arrived in Britain without permission in small boats across the English Channel.

"Instead of stoking fears over Channel crossings, ministers whose plans rely on high levels of economic migration should be levelling with the public about the economic benefits immigration can bring," said James Kirkup, Director of the Social Market Foundation.

(Reporting by Michael Holden; Editing by Kate Holton)