UK on track for record number of new company creations in 2024

The UK is on track for a record year of new company creations in 2024, new data suggests, in a positive sign for the country’s economic prospects.

There were a record 468,000 new business incorporations at Companies House in the first half of 2024, up more than six per cent from either half of last year, according to a report from Beauhurst and Natwest.

If this pace is maintained, the annual total will surpass last year’s record figure of 879,000, which itself was up 10.6 per cent from 2022.

The numbers underscore a surge of activity in recent years, with the 248,000 start-ups launched in the first quarter of 2024 marking a 43.4 per cent jump from the same period in 2020.

The report estimated that the first three months of 2025 would set another quarterly high and could surpass 250,000 incorporations.

There are now around 5.47m active and dormant companies in the UK. The report said growth in the first half of 2024 was mainly driven by the wholesale, retail and professional services sectors – together accounting for around 36 per cent of the new incorporations.

London saw the most incorporations of any region in the first half of 2024, with a 7.38 per cent rise on last year to 161,000. Business launches in Northern Ireland soared 90 per cent to 10,400.

The West Midlands and Yorkshire and The Humber recorded the UK’s next highest growth rates at 10.1 per cent and 8.15 per cent respectively.

“The UK’s potential for growth is made clear by the numbers of people now starting their own businesses,” said Paul Thwaite, Natwest’s chief executive.

“Small businesses are the lifeblood of our economy, accounting for three-fifths of employment and about half of the private sector’s turnover. If these new businesses are given the right conditions to succeed, they could significantly boost the UK economy.”

Henry Whorwood, managing director at Beauhurst, added: “Certain aspects of the economy are firing on all cylinders. UK entrepreneurs are still starting lots of new businesses. This may mark the beginning of a new normal with higher rates of entrepreneurship in the UK economy than known previously.”

While the figures point to the UK’s resilient entrepreneurial climate, the macroeconomic background remains tough as businesses grapple with inflationary pressures and higher interest rates.

England and Wales recorded the second-highest number of company insolvencies since 2009 in June, according to government figures. Last year’s 25,158 insolvencies marked the highest yearly total for 30 years.