New EU citizens as well as their koruna and zloty are contributing to a surprisingly robust UK economy, according to the Ernst & Young ITEM Club Spring forecast, on the eve of the second anniversary of the accession of the ten latest member states.

"We are on the crest of a new immigration wave," says Professor Peter Spencer, chief economic advisor to the think tank. "The steady flow from the most recent accession countries to the UK has proved remarkably positive for the economy, keeping interest rates a half a per cent lower than they would otherwise have been," he said.

From Poland to Slovenia these individuals have plugged gaps in a variety of industries, from agriculture to hospitality and catering with nearly 300,000 immigrants taking new jobs in the UK in the last 3 years, Prof. Spencer points out.

"Unlike previous occasions that have been confined to major urban centres, this influx has benefited many regions across the UK from East Anglia to Edinburgh," he said. "As a direct result the UK workforce has become younger, more flexible and economical, easing the pensions burden and keeping interest rates lower than many commentators could have predicted."

"Even with a modest rise in unemployment numbers we are looking at a very favourable cost-benefit ratio," he added.

Meanwhile, the Institute for Public Policy Research estimates that around 41,000 Romanians and 15,000 Bulgarians will come to work in Britain in the first year if Brussels gives the countries the go-ahead to join on January 1, 2007.

Arguing that the government should allow labour market access to Romanian and Bulgarian nationals, the IPPR said that although Romania and Bulgaria are poorer than the countries that joined last time, most migrating Romanians and Bulgarians will want to go to Italy, Spain and Greece because they are closer and have higher numbers already resident.

The research institute, which is generally regarded as close to the Labour government, said the impact of Romanian and Bulgarian migrants on the economy would be limited and largely positive.