The UK showed some encouraging signs of an economic resurgence as all of the regions and nations, including Yorkshire and the Humber, recorded growing numbers of new businesses launching in July compared with the previous month, according to the UK’s insolvency and restructuring trade body, R3.
Based on an analysis of data provided by CreditSafe, the research from R3, revealed that having seen falling month-on-month levels of start-ups in February and March 2024, Yorkshire and the Humber experienced a peak in April before they again declined in May. After a minimal rise in June to 3,794, in July they increased by 7.4% to 4,076.
Looking across the 12 regions and nations, the strongest performances were in Northern Ireland with a 36% rise in new businesses, followed by Scotland (up by 14.8%) and Wales (up by 13.2%). In contrast, start-ups in Greater London grew by just 1.6% between June and July, by 4.9% in East Anglia and by 5% in the East Midlands.
However, improvements to insolvency-related activity appeared more patchy with only four regions and nations seeing a drop in levels last month compared with the previous month. Yorkshire and the Humber experienced an increase of 9.9% month-on-month with 256 businesses affected in July, 23 more than in June. Those that saw the greatest increases were Wales, up by 22.4%; and the North West, up by 14%.
The regions which experienced the largest drops in this type of activity (which includes liquidator and administrator appointments and creditors’ meetings) were East Anglia (-16%), the East Midlands (-11%), the South West (-12.1%) and Scotland (-0.8%).
Dave Broadbent, chair (pictured) of R3 in Yorkshire and partner at Begbies Traynor in York and Teesside, commented: “While the recent interest rate cut will improve access to finance for both businesses and individuals, rates remain well above pre-Covid levels and many homeowners and businesses are still struggling under this burden. With some economists predicting that further cuts before the end of the year are unlikely as inflationary trends persists, it seems that the cost of borrowing will remain high for some time to come.
“In such a difficult environment, it is good to see growing confidence among would-be entrepreneurs both here in Yorkshire and across the UK. Small businesses are acknowledged to be the lifeblood of the economy and will be vital if the new government is to reach its growth rate targets. However, with two-thirds of the UK, including our region, seeing insolvency-related activity continuing to rise last month, the worst may not yet be over. We urge business owners to remain cautious - keep a tight hold of expenditure and turn to insolvency professionals as soon as you spot financial problems to prevent them from escalating.”
