British entrepreneurs enjoyed a five-year high in opportunities ahead of the EU referendum
Britain enjoyed a five-year high in opportunities for entrepreneurs leading up to the EU referendum in June, but that progress is at risk of being set back by current uncertainty.
According to Barclays' Entrepreneurs Index, overall UK entrepreneurial performance is at an all-time high – up 10 per cent since 2011 and showing strong progress following a decline in 2014. But a lack of new scale-up businesses, as well as market uncertainty, risk the UK under performing and could harm the nation's growth prospects.
Startup activity has fallen – down by nearly four percentage points up to the end of 2015, which Barclays said reflected the UK producing fewer businesses with ambitions of scaling up.
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There has been an increase in the number of business exits: a 19 per cent rise in the number of M&As of firms less than five-years-old and a record high number of deals from December 2015 to June 2016 (up 33 per cent).
The jump was driven by the UK services sector, which accounted for 23 per cent of all deals that took place, followed by financial services firms (10 per cent).
However, there was also a steep drop in IPO activity by 36 per cent, which Barclays said indicated a lack of confidence among firms to expand, as well as increasing market volatility.
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Akshaya Bhargava, chief executive of wealth, entrepreneurs and business banking at Barclays, said:
This year’s Entrepreneurs Index shows that before the EU Referendum, regulations and conditions for entrepreneurs had improved, making it easier to start a business and contributed to a rise in M&A.
Until the outcome is fully known, it’s vital that we do everything in our power to deliver a strong environment to sustain UK entrepreneurial growth.
This research comes ahead of the government's unveiling of grants for female entrepreneurs. This week Innovate UK will award 15 female entrepreneurs grants of £50,000 through its new Women in Innovation programme. A further 19 will be placed on a support programme with access to successful mentors.