UK business population hits record despite new startup slowdown
Business in the UK is booming, with the UK’s active business population hitting a record 5.66 million companies. Despite a moderation in new company incorporations, this figure highlights the strength and adaptability of British entrepreneurship.
This comes from the latest New Startup Index, produced by NatWest in partnership with Beauhurst. A total of 402,000 new businesses were registered with Companies House in the first half of 2026, which is a 5.7% decrease compared with H1 2025. However, entrepreneurial activity remained widespread across every region of the UK, with the continued growth in the active company base providing evidence of the resilience of the UK business landscape.
Technology startups were a standout performer, with application software becoming the UK’s most active startup category with 28,100 new businesses incorporated. The wider technology sector also recorded strong growth, reflecting the continued innovation and investment in AI and emerging technologies.
When it comes to regional innovation, Scotland recorded the strongest growth in startup activity, with incorporations rising 3.72% compared with H2 2025. The East Midlands followed with growth of 3.30%, while London remained the UK’s leading hub for new business creation, accounting for more than 136,000 new companies.
Sebastian Burnside, Chief Economist, NatWest Group, said: “Britain’s startup economy is adjusting, not retreating. While incorporations eased in the first half of 2026, the active company base has continued to grow, showing the underlying resilience of UK entrepreneurs against a turbulent backdrop. The shift towards software and digital businesses is especially striking and speaks to the economy’s changing centre of gravity as technology transforms what we do and how we do it. This underlines the importance of backing the founders who are driving those opportunities wherever they are, connecting them to the right support, and helping turn ambition into long-term growth.”
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