The number of start-ups in Yorkshire and the Humber saw an impressive rise last month, aligning with the national trend of increased business formations.
According to data from the UK’s insolvency and restructuring trade body, R3, new business numbers increased significantly in July, signalling a positive economic shift.
Economic Resurgence Across the UK
The UK has shown encouraging signs of an economic resurgence. All regions and nations, including Yorkshire and the Humber, reported a rise in new businesses last month.
According to R3, the UK’s insolvency and restructuring trade body, new business formations in Yorkshire and the Humber peaked in April after falling in February and March.
Increase in Start-ups in Yorkshire and the Humber
In Yorkshire and the Humber, start-ups increased by 7.4% in July, reaching 4,076, up from 3,794 in June. This growth followed a minimal rise in June.
Other regions also saw significant increases, with Northern Ireland leading at 36%, followed by Scotland at 14.8%, and Wales at 13.2%.
Start-ups in Greater London grew the least, at just 1.6%, followed by East Anglia at 4.9% and the East Midlands at 5%.
Patchy Improvements in Insolvency-related Activity
Improvements in insolvency-related activity were inconsistent. Only four regions saw a drop in activity last month compared to the previous month.
Yorkshire and the Humber experienced a 9.9% increase in insolvency-related activity, with 256 businesses affected in July, 23 more than in June.
Variation Across Regions
Wales saw the greatest increase in insolvency-related activity, up by 22.4%, followed by the North West at 14%.
Conversely, East Anglia experienced a 16% decrease, the East Midlands an 11% decrease, the South West a 12.1% decrease, and Scotland a 0.8% decrease.
Impact of Interest Rates on Business
Dave Broadbent, chair of R3 in Yorkshire, noted that the recent interest rate cut will improve access to finance but rates remain high compared to pre-Covid levels.
“Many homeowners and businesses are still struggling under this burden,” he stated.
Some economists predict that further rate cuts are unlikely this year due to persistent inflationary trends, leading to continued high borrowing costs.
Caution Advised for Business Owners
Broadbent urged business owners to be cautious in such a difficult environment. He emphasised the importance of controlling expenditure and consulting insolvency professionals at the first sign of financial issues.
“With two-thirds of the UK, including our region, seeing insolvency-related activity rise last month, the worst may not yet be over,” he warned.
The increase in start-ups is a promising sign for Yorkshire and the Humber, reflecting a broader national trend. However, with insolvency-related activities also on the rise, caution is advised.
Business owners are encouraged to manage expenses carefully and seek professional advice promptly to mitigate potential financial issues.