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Switzerland has decisively rejected a proposal to cap its population at 10 million, with voters prioritising economic stability and strong ties with the European Union over concerns about immigration straining public services and driving up rents.

A nationwide referendum saw almost 55 per cent of Swiss voters oppose the measure, while 45 per cent supported it.

The vote, which drew comparisons to Britain's 2016 Brexit referendum, had caused considerable anxiety among businesses, fearing it could jeopardise the free movement of labour between Switzerland and the EU, its primary trading partner.

Championed by the right-wing Swiss People's Party (SVP), the proposal stipulated that the population must not exceed 10 million before 2050. Should this threshold be surpassed for two consecutive years, Switzerland would be required to terminate its freedom of movement agreement with the EU.

The government had urged voters to reject the cap. Swiss Justice Minister Beat Jans welcomed the outcome but pledged to analyse further steps to address voter concerns regarding housing and immigration.

"With today's decision, the electorate has sent out a signal of stability, openness, and reliability," Mr Jans told a press conference alongside Swiss President Guy Parmelin.

Urs Bieri from pollster GFS Bern suggested the cap failed because, despite widespread concern about population growth, people worried it could damage Swiss relations with the EU and hinder the recruitment of essential staff, such as carers.

"Also there's a feeling that in the current international environment, it's not sensible for a small country to do this," Mr Bieri added.

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Switzerland's population currently stands at 9.1 million, having grown significantly faster than in surrounding EU nations.

Foreigners constitute nearly 28 per cent of the total, with official projections forecasting the population will reach 10 million by the early 2040s. While polls had predicted a close contest, the 'no' camp's victory proved clearer than many analysts had anticipated.

Zurich schoolteacher Jan Hesselmann, 27, expressed satisfaction with the result but voiced concern over the proposal's level of support. "It's the wrong way to go about it, it fuels xenophobia," he said.

The cap proposal emerged amid growing support for policies aimed at curbing immigration across Europe, with campaign posters controversially claiming only 10 per cent of incomers were skilled workers and that asylum seekers were more likely to be rapists.

Turnout for the referendum was approximately 59 per cent, significantly higher than the recent average of 48 per cent for Swiss referendums. Marcel Dettling, president of the Swiss People's Party, noted that the initiative had been very popular in rural areas but was ultimately defeated by urban voters.

"Not a single problem has been solved," he stated. "We will continue to push for sensible immigration."

Business groups largely welcomed the referendum result, having previously warned that a population cap would restrict access to foreign workers, harm the economy, and sour relations with Brussels.

Business association economiesuisse urged Switzerland to leverage the momentum from the result to ratify a deal struck with Brussels in late 2024, aimed at deepening bilateral economic ties. EU Commission President Ursula von der Leyen affirmed that Brussels and Bern would continue to collaborate for the benefit of their citizens and businesses.

Opponents had labelled the population cap proposal a "recipe for chaos" due to the potential upheaval it could cause. They also questioned the wisdom of clashing with Brussels, particularly after a challenging 2025, when President Donald Trump imposed the highest US tariffs in Europe on Swiss goods.

The 'no' campaign notably ran posters featuring an image of a smiling Trump with the caption: "Breaking with Europe, now of all times?"

Sibel Arslan, a Green Party federal lawmaker, commented that the result demonstrated Switzerland's continued commitment to working with its European neighbours.

However, she cautioned that a "taboo had been broken" that was likely to resurface. "The damage is done," she warned. "This has legitimised talk about capping the population. The genie is out of the bottle."