Biz tax rises, inflation and high interest. Why fewer UK tech firms started in 2024
For the first time since the start of the pandemic, the number of tech firms incorporated in the UK has declined, with a shrinking economy, as well as high inflation and interest rates causing a slump in business confidence.
Some 48,518 new tech companies were created in 2024, dipping 5 percent on the 51,017 recorded during the prior calendar – the first downward trend since 2020.
The "slowing tech sector" will "come as more tough news for the Chancellor," said Ben Bilsland, partner and head of technology industry at audit, tax and consulting biz RSM UK.
He added: "With weak economic growth, high interest rates and high inflation, and businesses set to bear the brunt of the Chancellor's tax rises, confidence among tech businesses is diminishing."
The size of the UK economy has decreased for the previous two months and government is staring down the barrel of a recession. It has already hatched a plan to use AI to boost productivity and trigger economic growth, deploying tech bosses to help escape the deepening hole the country finds itself in.
