As cost pressures limit UK business growth to just 0.23% over the past five years, new research from money.co.uk bank accounts has revealed that the South East ranks 11th compared to other regions, with a 2.56% decrease in VAT and PAYE-registered businesses.
The business finance experts analysed ONS data to highlight which areas are thriving and which are falling behind, and provided comment on the shifting business landscape.
UK total businesses by region
Northern Ireland saw the most significant increase in the number of businesses of any UK region, rising by 5.85%. Its unique position allows it to benefit economically from the EU single market and the UK internal market. This has made it an ideal location if you plan to sell products in the UK and EU, attracting investment and promoting economic growth.
The North East saw the second-largest increase in the number of businesses in the UK, and the largest in England, at 2.41%. With the lowest GDP per capita in the country, the region may offer lower startup and operating costs, making it an attractive base for businesses.
Yorkshire and the Humber had the third most significant increase in the number of businesses, rising by 2.36% or 4,385. Bordering the North East region, Yorkshire and the Humber’s increase in businesses suggests a broader geographic boom, with no other region seeing an increase above 2%.
While Scotland saw the most significant decrease in the number of businesses at 2.72%, the South East of England also saw a considerable decline of 2.56%, with 10,620 fewer businesses in 2024 than in 2019. This decline in the South East does not include London, where businesses rose by 1.64%.
These figures indicate a shifting business landscape with economic activity leaving the historically very economically strong South East and moving northwards to areas with typically smaller economies.
Joe Phelan, money.co.uk bank accounts expert, said: “Recent shifts in the UK’s business landscape highlight how responsive different sectors must be to broader trends. To succeed in this changing environment, businesses must be agile and tech-savvy.
“Whether it’s using AI to streamline operations or targeting customers through digital marketing, those who embrace new tools will be better positioned to thrive.
“At the same time, location still matters. Setting up in lower-cost regions like the North East can offer a financial edge, particularly for online-only businesses, by reducing overheads and extending your runway.”
View the full report, including the methodology, here.
