The number of new businesses in London keeps on rising
The capital’s still the place to be for budding businesses, according to new figures from the Office for National Statistics (ONS).
London has the largest number of VAT and/or PAYE-based businesses – 18.7 per cent of the UK total, as well as experiencing the largest growth – up 7.2 per cent between 2015 and 2016. Its growth for 2014-2015 was 6.9 per cent.
In August, EY's Startup Barometer Germany report found that startups in the capital had received more investment in the first half of the year than any other European city. They picked up €1.3bn (£1.1bn), compared to the second city Stockholm, where firms raised just over €1bn.
The number of businesses in the UK
Overall, there were 2.55 million businesses registered for VAT and/or PAYE in the UK in March 2016, up 4.3 per cent on the same time last year, when there were 2.45m businesses.
The largest industry group for 2016 was professional, scientific and technical, with 18 per cent of all registered businesses in the UK – compared to 17.8 per cent for last year.
The number of companies and public corporations has increased and now represents 68.8 per cent of all firms, while the number of sole proprietors and partnerships dropped to 27.4 per cent of total businesses.
Read more: 10 London startups named the hottest in Europe
The upwards trend in the number of businesses was, the ONS noted, reflective of the UK economy's recent performance. In the twelve months to quarter one from 2014 to 2016, GDP rose by 2.6 per cent, 2.9 per cent and 2.0 per cent, while CPI inflation was 1.6 per cent, 0 per cent and 0.5 per cent in the years to March 2014, 2015 and 2016 respectively.
"This strong growth and low inflation may have provided a good environment for businesses to set up," the ONS research said. The oil price remaining historically low may have also put downwards pressure on firms' operating costs.