Yorkshire and the Humber’s economy was hit by a double blow last month, according to the latest research from the UK’s insolvency and restructuring trade body, R3. The data shows a marked decrease in new business start-ups in the region, along with a small rise in insolvency-related activity, in a pattern that was repeated across the UK.
In Yorkshire and the Humber, insolvency-related activities, which include liquidator and administrator appointments and creditors’ meetings, were up by 5%, from 220 in November to 231 in December. Business start-ups fell by 16% in the region, following a 16% decline in November, and taking the number of new start-ups in the region to 3,235.
Insolvency-related activity increased in December across every UK region apart from Scotland, which saw a 32% drop, and South East England where it fell by 4%. The North East and Greater London saw the largest hikes in insolvency-related activity, up by 60% and 25% respectively.
While insolvency-related activity was largely on the rise in December, R3’s analysis, which is based on data from business intelligence and credit checking provider Creditsafe, also revealed a decrease in the number of start-ups across the country.
Mirroring the falls in entrepreneurial activity in Yorkshire and the Humber, every UK region was affected by double-digit percentage declines in the number of new start-ups in the final month of 2024, from a 10% fall in the West Midlands, to 17% in the East Midlands.
Dave Broadbent, chair of R3 in Yorkshire and partner at Begbies Traynor in York and Teesside, said: “December’s double whammy of increased insolvency-related activity and the falling numbers of new business start-ups is extremely concerning and comes as we are also seeing levels of UK business confidence plummet to their lowest since the 2022 mini-budget.
“Rising costs and taxes are putting firms under immense pressure and unfortunately that increased burden looks to be already having a negative effect on hard-pressed businesses as well as deterring new start-ups.
“While there may be a period of readjustment to new measures such as the hike in employers’ National Insurance contributions announced in the Government’s Autumn budget, we always advise any businesses that have financial issues that are becoming a problem to seek professional help earlier rather than later to ensure the best outcome possible.”
