The life of an entrepreneur is tough, especially outside London as the number of UK businesses created in 2023 falls 11% to 316,000 from previous year.

London had the highest business birth rate, at 12.6%, however, this is the lowest birth rate for London since 2009.

Business death rate highest in the West Midlands (12.4%) and 39.4% survival rate for businesses created five years ago.

Largest sector of new businesses but also business deaths were in the Professional, scientific and technical industry, followed closely by construction.

The ONS has today published annual figures on business demography for 2023, which provides a break down in the annual change in the number of UK businesses, broken down by sector of the economy.

Jonathan Moyes, Head of Investment Research at Wealth Club said, “The data released today does not paint a rosy picture for the health of business formation. Far fewer businesses were set up in 2023 than in 2022.

The data also shows just how perilous the life of an entrepreneur can be. Of all the businesses created in 2018, just 39% survived five years later. It is a stark reminder of the risks entrepreneurs take when starting a new venture, and why the government should be providing all the support it can to help these businesses in their formative years.

Regional disparities are also hard to ignore. The case for additional support to regional businesses is clear. London significantly outperforms all other regions when it comes to the proportion of businesses classed as “high growth” (20% employment growth per annum over three years). 6.3% of London based businesses with 10 or more employees are classed as “high-growth”. This is followed by the South East at 4.9%, and South West at 4.8%. West Midlands and Northern Ireland were at the bottom of the table at 3.9% and 3.1% respectively.

Small businesses are the engine room of economic growth and it should be incumbent on the government to do all it can to support them. This will not only help to grow the tax take but create high value jobs and productivity gains that can help lift living standards across the country.”