New business openings across the UK hit their lowest rate in more than a decade last year, official figures show.
Data from the Office for National Statistics (ONS) shows 316,000 new businesses were created in 2023, down from 337,000 the year before.
This means the rate of new businesses opening hit its lowest level since 2010, at 11% of all active firms.
This was a fall from 11.5% a year earlier.
Anna Leach, chief economist at the Institute of Directors, blamed poor financial conditions after the pandemic, a “relatively weak” growth environment and skill shortages.
“Meanwhile, higher public spending is expected to raise the cost of finance in the UK.”
“If the Government wants to get higher growth, it’ll need a vibrant business sector to deliver it.”
Despite this, there were slightly more business openings than closures, with the death rate dropping to 10.8%.
This was a reversal from 2022, which was the first year in more than a decade where there were more deaths than births.
The figures also showed an increase in the number of “high-growth” businesses, those which saw their workforce swell by more than 20% for three years in a row.
There were 13,750 such businesses nationally in 2023, an increase from 11,480 a year earlier.
However, Mr Narayanan warned they will be competing with larger, established firms.
He urged the Government to ensure the Competition and Markets Authority has the backing it needs to stop larger businesses from “throwing their weight around to stifle competition”.
There were stark regional differences in where high-growth companies were located.
Accounting for nearly a quarter of all high-growth businesses with at least 10 employees, London had 3,300, with a birth rate of 6.3%.
Looking at individual industries, the transport and storage sector industry had both the highest business birth rate (14.5%) and the highest death rate (21.6%).
At the other end of the scale, finance and insurance saw the lowest proportion of new businesses (6.4%), while the health sector had the best survival rate, with just 6.5% of firms going under.
