DATA

UK sees freak decline in new businesses being started

By Oliver Smith 5 May 2017
Summary

Fewer shops, fewer jobs, and falling confidence.

Would you risk starting a business today? It seems fewer Brits are willing to try.

We’ve seen new stats that today reveal tumbling confidence among UK entrepreneurs during the start of 2017.

Between January and March of this year 173,100 new businesses were started, but that’s actually a 2.5% fall on the same period in 2016.

That’s thousands of fewer high street shops, fewer tech firms, and of course, fewer jobs.

In fact, not since 2008’s financial crisis has Britain witnessed such a sharp decline in the number of new businesses being started, analysis of figures by The Memo shows.

Stats compiled from DueDil's analysis of Q1 incorporation dates.

Based on these figures, we can expect there to be 17,096 fewer businesses incorporated compared to 2016 – these Q1 statistics are a good indicator of the rest of the year. 

Justin Fitzpatrick, the co-founder of DueDil which compiled the figures, blamed the decline on a prevailing “cautious attitude” growing among businesses, especially with Brexit looming.

“For an entrepreneur to start a business is always risky, and to do it during an uncertain time, when your future trading environment is unclear, could be too big a risk for some.”

Other factors that are likely to weigh on entrepreneur’s confidence are Theresa May’s decision to call a snap election and ongoing uncertainty around Britain’s future trade relationship with the US under President Donald Trump.

And entrepreneurs aren’t the only ones lacking confidence. According to YouGov, rising inflation is adding to people’s fears around their job security and living costs.