Industry bodies have welcomed a report that says government support is needed to address the UK's skill shortage.
The government commissioned the Migration Advisory Committee (MAC) to undertake a detailed study on the impact of migration on the UK last summer to guide the government's post-Brexit immigration policy. The interim update summarises the more than 400 calls for evidence the MAC received.
The report said most employers do not deliberately seek to fill vacancies with migrant workers, but the best available candidate, and migration limits would "very likely" lead to lower growth in total employment and output.
However, the report also said: "Employers denied that low wages were part of the image problem but when, for example, 95% of jobs in hospitality pay below average hourly earnings, we were not always convinced by this argument."
It said the claim that small margins and rising cost pressures mean that higher wages were unaffordable was credible.
UKHospitality chief executive Kate Nicholls said: "Most encouragingly, the report identifies the need for vocational reform and education within the UK, to help support a vibrant and dynamic hospitality sector that nonetheless sometimes struggles to attract employees from within the UK.
Angela Coleshill, competitiveness director at the Food and Drink Federation said UK businesses were "rightly worried" about what a future migration system might look like once the UK leaves the European Union and the final report "must fully address these concerns".
The final report is expected to be published in September 2018.