New figures from the UK’s insolvency and restructuring trade body, R3, reveal that Yorkshire and the Humber experienced a significant rise in new business start-ups between August and September. The region saw a 7.7% increase in new businesses, with a total of 4,235 start-ups in September, according to data analysed by R3, based on research from CreditSafe. This represents over 300 more start-ups than the previous month.
This positive shift comes after a 3.5% decline in business formations between July and August, suggesting a rebound in entrepreneurial activity across the region. Yorkshire and the Humber ranked fourth in terms of growth among the UK’s regions and nations.
The overall trend of increased start-ups was reflected across much of the UK, with ten of the 12 regions and nations reporting rises in new businesses. Northern Ireland led the way with a 14.2% surge in start-ups, followed by the West Midlands with an 8.5% increase, and the South East with 8.3%.
However, the East Midlands and Scotland bucked the trend, experiencing declines in new businesses. Scotland saw a slight drop of 0.8%, while the East Midlands faced a more significant decrease of 3.6%.
Despite the growth in new businesses, the data also painted a more worrying picture for existing firms, with insolvency-related activities on the rise in certain areas. This includes liquidations, administrator appointments, and creditor meetings. Yorkshire and the Humber was among four regions where insolvency activity increased, rising by 16.6% in September to 246 businesses affected. Northern Ireland saw the most dramatic increase, with insolvencies up by 109.1%, while the West Midlands (up by 2.9%) and Greater London (up by 1.5%) also experienced increases.
Conversely, some regions saw notable reductions in insolvency-related actions. Wales recorded the most significant drop, with a 30.1% decrease, followed by the North East (down by 26.3%) and Scotland (down by 26.1%). The remaining five regions also saw double-digit declines in insolvency activity.
Dave Broadbent, chair of R3 in Yorkshire and partner at Begbies Traynor in York and Teesside, cautioned that while the rise in start-ups is encouraging, the wider economic climate remains challenging.
“After the initial feel-good factor following June’s general election, it appears that business confidence is once again declining, which is negatively impacting the UK economy. With warnings of a tough budget at the end of the month, many businesses are still cautious, although some economists continue to predict growth, albeit at a slower rate than earlier in the year,” Broadbent commented.
He added that the continued high interest rates and rising living costs, particularly with another winter of increased energy prices, are placing pressure on businesses. “It’s encouraging to see so many entrepreneurs here in Yorkshire and the Humber, as well as other parts of the UK, launching new ventures. However, with insolvency-related activity also increasing in several regions, it’s still a tough environment to navigate. We encourage business owners to seek professional advice at the first sign of financial distress.”
As the UK approaches the Autumn Budget, businesses across the country await further guidance on what the economic landscape will look like for the months ahead.
