Much of the UK showed a worsening economic picture in November with many regions and nations, including Yorkshire and the Humber, seeing the pressure of high interest rates continuing to take its toll as the number of start-ups fell since the previous month while levels of insolvency-related activity rose.
According to the latest research from the UK’s insolvency and restructuring trade body, R3, based on an analysis of data provided by CreditSafe, only four of the 12 regions and nations surveyed saw a rise in the number of new businesses last month. Yorkshire and the Humber’s performance ranked around the middle with a fall of 3.3% month-on-month, while Northern Ireland achieved the highest levels of new businesses (up 11%) followed by the West Midlands (up 2.9%) – all of the others saw either a small rise or a fall since October.
However, the figure of 4,744 start-ups in Yorkshire and the Humber last month was among the highest during 2023 with only March (5,315) and October (4,907) seeing significantly more new businesses. Looking at the year-on-year figures, November 2023 represented a 1.7% rise compared with November 2022.
In terms of levels of insolvency-related activity (which includes liquidator and administrator appointments and creditors’ meetings), two-thirds of the regions and nations saw a rise in November compared with the previous month. Yorkshire and the Humber was among those with the greatest increases (up by 19.1%), closely followed by Wales (up 19%) and East Anglia (up 18.8%). The strongest performances were in the East Midlands (-8.7%), Northern Ireland (-7.4%) and the South East (-4.3%).
“Increasingly, GDP data is showing the UK as a ‘stagnation nation’ and it is concerning to see this being borne out with our latest analysis of the research revealing falling numbers of new businesses and growing insolvency-related activity here and across much of the country,” comments Eleanor Temple, chair of R3 in Yorkshire and a barrister at Kings Chambers in Leeds. “The economy appears to be flatlining with little sign of sustained growth, and the impact of inflation is continuing to hamper consumer spending and business activity in what should be one of the busiest periods of the years.
“There’s no doubt that the rapid rise in interest rates since late 2021 is taking its toll and it now looks like there is a real risk of the UK falling into recession next year. With January renowned as one of the most difficult trading months for many sectors, it is vital that directors approach the New Year with caution and enlist the services of qualified insolvency professionals as early as possible should any signs of financial problems appear.”