There is some reason for cautious winter economic cheer with the latest research from the UK’s insolvency and restructuring trade body, R3, showing that all regions and nations across the UK, including Yorkshire and the Humber, saw an increase in the number of new businesses launching in January 2024 compared with the previous month.
According to the research, based on an analysis of data provided by CreditSafe, the number of start-ups in Yorkshire and the Humber rose by 39% from December 2023 to January 2024, with another 5,405 new businesses setting up in the region last month – over 1,500 more than in the previous month.
Some other regions and nations performed even more strongly with the North East seeing a 61% rise month-on-month; the South East up by 54%; and the South West and Wales experienced a 50% uplift. The lowest increases were in Northern Ireland with a 33% rise; and in the West Midlands, up by 35%.
However, there was a less rosy picture in Yorkshire and the Humber in terms of insolvency-related activity last month. While this type of activity (which includes liquidator and administrator appointments and creditors’ meetings) fell in all 12 regions and nations, Yorkshire and the Humber saw the smallest drop with a decrease of just 4.8% since December.
This means that in January, 236 businesses in the region were affected. The North East also saw a single digit drop in insolvency-related activity (-9.5%); followed by Wales (-13.3%); and the North West (-19.6%).
In contrast, the greatest decreases in insolvency-related activity were in Northern Ireland (down by 58%); followed by the South East (-35%); the East Midlands (-34.5%); and the South West (-33%).
Eleanor Temple, chair of R3 in Yorkshire and a barrister at Kings Chambers in Leeds, said: “It is certainly encouraging to see so many brave entrepreneurs across the UK having the confidence to launch a new business as we head into 2024, and also fewer businesses last month being impacted by insolvency-related activity.
“It is perhaps a sign that the tide is turning and people are starting to feel that the worst is over as inflation steadies and there is talk of possible interest rate drops later in the year.
“However, the UK economy is continuing to disappoint with inflation proving to be sticky, operating costs rising and consumer spending remaining under pressure. In such a difficult landscape, many businesses may be heading towards insolvency and would be well-advised to seek professional advice as soon as possible to avoid financial problems spiralling out of control.”
