Business numbers grow against challenging backdrop
According recent data from the Office for National Statistics (ONS), the number of registered businesses in the UK continues to rise amidst increasing challenges from economic uncertainty, labour costs and rising energy prices.
There were 2.79 million VAT and/or PAYE-registered businesses operating in the UK in March 2026, representing a 1.9% increase compared with March 2025.
The number of companies has continued to grow and now accounts for 77.3% of all UK businesses. Meanwhile, the proportion of sole proprietorships and partnerships has fallen to 19.2%.
Professional, scientific and technical services remains the UK’s largest business sector, accounting for 15.3% of all registered businesses. The figures also show that every UK region recorded an increase in business numbers during 2026, the first time this has happened since 2017.
The total number of business sites, known as local units, also rose by 1.6% year-on-year to 3.2 million.
Elsewhere, ONS survey data highlights a challenging picture for many organisations on the ground.
The latest Business Insights and Conditions Survey found that 28% of trading businesses reported a fall in turnover during August. This was six percentage points higher than in July and broadly in line with the position a year earlier.
Among businesses employing 10 or more people, 31% reported declining turnover, up seven percentage points on the previous month.
Economic uncertainty remains the most commonly cited factor affecting turnover, with 29% of trading businesses identifying it as a challenge during September. For larger employers, labour costs were the most significant concern, with 37% reporting cost of labour pressures.
Price rises also appear set to continue. Around 17% of trading businesses expect to increase the prices of the goods and services they sell during October, up from 14% the previous month and 10% a year earlier.
The construction sector was particularly notable, with 32% of firms expecting to raise prices. The ONS said this was the highest proportion recorded by the industry since February 2023.
Energy costs are also re-emerging as a major concern. In early September, 64% of businesses reported some level of concern about energy prices, up five percentage points from late August.
Several respondents attributed these concerns to the ongoing conflict in the Middle East. Businesses in the accommodation and food services sector were especially affected, with 90% expressing concern about energy costs, the highest level recorded since the question was first introduced in March 2026.
The ONS’s latest real-time economic indicators suggest these pressures are being reflected elsewhere across the economy.
Data from the Department for Energy Security and Net Zero showed average automotive fuel prices were increasing faster than a year ago, while fuel demand per transaction remained weaker. Gas prices also remained elevated, with the wholesale system average price 146% higher than during the same week in 2025.
At the same time, Insolvency Service data showed potential redundancies rose by 2% in the week to 13th September compared with the previous week, although they remained 4% lower than a year earlier.
The housing market delivered a more mixed picture. Rightmove data showed new rental listings fell by 6% week-on-week, but remained 16% higher than a year ago. New property sales listings increased by 4% on the previous week and were 13% higher than the equivalent period in 2025.
Taken together, the figures suggest that while the UK’s business population continues to expand, many firms are operating in an increasingly uncertain environment characterised by cost pressures, cautious consumer demand and renewed concerns over energy prices.
