Number of new firms in the UK on the rise despite the pandemic

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The rate of new business starts-ups in the UK rose in the Q3 despite the impact of the pandemic.

An analysis of new business formats of ONS data by digital bank Starling, show 95,395 new firm formations from April to June, compared to 90,590 in Q3 of 2019, representing a rise of 5.3%

Wales experience the biggest percentage rise, at 99%, up from 3,055 to 6,070.

Of the nations and regions of the UK only the East Midlands, the South East and the East of England experienced a decline.

  Businesses started Q3 2019 Business started Q3 2020 Percentage change
UK

90590

95395

5.3%

North East

2335

2440

4.5%

North West

9510

10050

5.7%

Yorkshire and the Humber

5685

6055

6.5%

East Midlands

5605

5530

-1.3%

West Midlands

7185

7405

3.1%

East

8090

7875

-2.7%

London

23740

24150

1.7%

South East

12890

12795

-0.7%

South West

5975

6305

5.5%

Wales

3055

6070

98.7%

Scotland

6070

5295

3.4%

Northern Ireland

1400

1425

1.8%

The data also showed the impact of government lending schemes have had on rescuing firms in trouble, with the number of ‘business deaths’ across the UK during this period falling by more than 7% since last year.

 The trend was particularly prominent in Wales and the North West, where 24% and 22% fewer companies respectively, folded in Q3 this year compared to 2019.

Starling’s analysis also shows the different fortunes of specific industries during the pandemic. The number of new businesses launched in accommodation and food services is down 62% on last year, while new firms in arts and recreation are down 59%.

Conversely, new companies falling into the bracket of business admin and support services are up 143%, and new wholesale ventures are up 44%.

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Anne Boden, chief executive and founder of Starling Bank, said: “The pandemic has given many people time. Time to develop an idea, formulate a plan and action it. It is this kind of resilience which will really bolster the UK economy when we start to ease out of lockdown which is why enabling SMEs to open new business accounts has been so critical during this time.”


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