The number of new businesses created in the UK fell by 3.5% over the past year, according to official figures showing particularly sharp declines in hospitality and health and social care. The Office for National Statistics (ONS) recorded 69,895 business creations between July and September 2026, compared with the same quarter of 2025. Creations declined in 11 of 16 main industry groups.
Hospitality and health sectors record sharp declines
Business creations in health and social care fell by 26.4%, while accommodation and food services recorded a 16.2% decline. These figures count enterprises added to the Inter-Departmental Business Register, not the number of jobs created or lost. The statistics do not establish why fewer businesses were registered.
Business closures also decline
The ONS recorded 63,035 business closures in the third quarter, down 1.1% year on year. Closures decreased in eight of the 16 main industry groups, with business administration and support services recording a 16.7% fall. It would therefore be misleading to suggest that business failures or closures accelerated in this period.
More creations than closures
There were 6,860 more recorded creations than closures during the quarter. However, this difference should not be treated as a definitive measure of business growth: additions and removals can lag behind the actual start or end of trading, and quarterly statistics use adjustments for reactivations and false business births.
What the figures measure
The ONS draws on VAT, PAYE, Companies House and business survey records to maintain its Inter-Departmental Business Register. These quarterly figures are designated official statistics in development and are not fully consistent with the preferred annual business demography series. The ONS also warns that turnover and employment data on the register should not be used as direct measures of economic or labour market growth.
Budget timing and wider economic questions
The figures were released on 29 October, a day after the Autumn Budget, but relate to July to September 2026. They cannot demonstrate the impact of measures announced in that Budget, nor establish that previous government policies caused the decline. Further quarterly releases will help show whether weaker business formation persists.
What happens next
The fall in creations across most industry groups provides an important indicator for policymakers and businesses to monitor. At the same time, the decline in closures and the limitations of the register-based data mean that the figures should be interpreted alongside investment, employment and wider economic indicators.